Biased Response from My Fico on Readers question on Authorized user accounts
There was a question submitted by a young lady named Renata from New Jersey who is currently looking for ways to improve her credit and purchase a home to which I was completely disatisfied with the response from My Fico. I have recently read lots of information on this topic (authorized users) as of late. I am hoping that Renata will read this as well. I utilize this service only because it is one of the more reliable (notice I did not say most) sources for what potential creditors see to make a decision about my credit worthiness. Although I have found in recent months that this is not even the most accurate dipiction, it merely gives you an idea because creditors actually pull from a number of sources. Sometimes going from one to another if they think it will be more favorable. But I digress.... It was quite disappointing to hear he response because there are a number of people that have seen positive benefits from this service (being added to an account as an authrorized user). I don't believe that it should be allowed to be purchased however if a family member or friend are willing to add you on then this should not be discontinued or changed in terms of how it is reported. When I was added to my fiance's account because he wanted for me to be able to use the account when planning our wedding I was in the process of purchasing a home. I had been added to the account a couple of months before but did'nt think much of it because I had not used the account yet. When I went to obtain a loan the account showed up on my account and it was actually impacting it negatively because the card was almost at the limit and made my debt to income ratio look high. Now I say this to say that My FICO and creditors would have no problem with this because the impact on me is negative (decreasing my credit score) but the benefit to them is positive (keeps my score down and me in higher interest loans) where the lender could now potentially make $300,000 on my loan as opposed to maybe only $200,000. Hmmmm and you wonder why they want to give high interest loans?.... It doesn't take rocket science to figure that out. I didn't go oh let me get this off so that it doesn't impact me. I discussed it with him and we paid that credit card down significantly so that it would be more positive for the both of us. So now if there are any positive benefits from it I should be able to reap the rewards from that as well. It is an extremely jadded and unfair system. I have read several articles on this matter and one most recently in Jet magazine which shared some not so surprising statistics. One that the people that have mostly been benefiting from this in the past were Whites. Now that the service is being offered by credit services which is mostly being used by minorities there is an issue with it. Why? Because minorities as a whole are typically less financially literate and savvy due to lack of exposure at an earlier age. This has been done among the wealthy which is predomonantly white for years. I think that there should be legislation passed that also looks at the disparities and practices among groups because it is not reasonable or believable to think that all or even the vast majority of minorities have bad credit. The reason you "MY FICO" are discouraging this is for both legitimate and illegitimate reasons. I do believe that you should encourage sound financial managagement/practices however it is no secret that creditors and credit bureaus are in this together... There is no real interest in the consumer. When you have a huge segment of people with poor credit scores you (creditors)are able to charge extremely high rates and make more money. Which in turn keeps the poor people poor. This practice is no different from any other business where people partner so that it benefits each party. You would have a hard time convincing me that there is no benefit for My FICO, the Credit beureaus or any other monitoring service because these are not government agencies (bureaus may be somewhat sanctioned by them but not owned) so it is a business for each of you. These agencies/services would not be in business if they were'nt making money. It is a basic business principle. I negotiate contracts (large ones) in healthcare that have a direct impact on the business and indirect impact on the consumer all the time. However it does not have an impact on their entire life. Determining whether than can purchase a home, educate their children, or obtain employment. I have had items placed on my credit that were not accurate as well as items where there was a misunderstanding on the agreement. I.E. length of deferrment due to Hurricane Katrina which once aware I was responsible and rectified but now have a late pay that the creditor is unwilling to remove. Why? Is this one instant during a time of complete chaos an accurate reflection of me? No it isn't and I have very limited recourse that of course if I can afford the time, energy and money that will cost to rectify the situation. I recognize that many will see this simply as the rantings of a person who has less than stellar credit and maybe there is some truth to that. But also consider the logic of all of the other things said and whether there is any truth to that. The one thing I learned at the Jesuit institution I attended (for $60,000 so I'm hoping it wasn't BS) is that as a people we should always question and challenge, never take one persons word as truth. Always investigate for yourself. That includes taking complete advice from MY FICO!
Re: Biased Response from My Fico on Readers question on Authorized user accounts
credit_pawn wrote: I negotiate contracts (large ones) in healthcare that have a direct impact on the business and indirect impact on the consumer all the time. However it does not have an impact on their entire life.
Welcome to the forum. Next time you post, please break it up into several paragraphs if you want others to read it.
I could comment on a lot of things you said, but this one really stuck out. Healthcare decisions made at the business level can definitely have a major impact on the consumer. Did you know that the main reason people file for BK is not because they went on a spending spree, but because they got hit with medical bills they couldn't afford (even if they had some insurance)? So there is certainly a connection between healthcare and an individual's credit (which, if you hang out here for more than 5 minutes, is everybody's entire life!!!).
----------------- Bartender, bring another round of FICOtinis please!
Re: Biased Response from My Fico on Readers question on Authorized user accounts
"I have read several articles on this matter and one most recently in Jet magazine which shared some not so surprising statistics. One that the people that have mostly been benefiting from this in the past were Whites. Now that the service is being offered by credit services which is mostly being used by minorities there is an issue with it. Why? Because minorities as a whole are typically less financially literate and savvy due to lack of exposure at an earlier age. This has been done among the wealthy which is predomonantly white for years."
hmm...Jet magazine...wonder how reliable that info is. Don't get me started on this subject. But I will say that I don't think for one second that this is a black/white issue. You can not blame ones credit worthiness on the color of their skin. Everybody starts with a clean slate, and it's your own decisions in life that affect how clean that slate stays. (unless you are a victim of fraud)My parents never really sat me down at a young age to talk to me about the almighty dollar, and I have made a few mistakes along the way. It is now my choice to fix them.
I'm sorry, but I get soooo sick and tired of hearing how "whites" are given more privileges in life versus any other race. We aren't living in the 1800's anymore. Everybody is given the SAME chance to prove themselves......
You said that AU's have been done by the wealthy which is predominantly white......are you stating a fact or your own opinion here???? I work in a practice that is somewhat diverse, and I have MANY patients that are AU on a family members account, and they are not all neccasarily white!!!!!!