Hi, My cousin just added me to her new credit card as an authorized user, but I was reading that this method now will not work in increasing my score due to certain new laws.. Can someone pls clarify?? Thanks a bunch. I spoke with the credit card company, and they informed me that they don't report to the credit bureaus since I am not responsible for payments. Does this mean it is useless??
The change is not due to a law, it's due to people gaming the system. Originally, authorized users were invented to give immediate household members credit (especially non-working spouses).
However, when it got to the point that people were selling tradelines, and with the concern over subprime mortgages, it was time to re-examine everything.
With this in mind, some companies have stopped reporting authorized users. FICO still uses AU accounts in calculating scores (as far as I know), but some companies may not be counting them in their internal scoring systems at this point.
So whether or not it'd help you IF it reported -- unclear at this point.
There was supposed to be a change in the way that scores are calculated, called FICO 08. Experian was going to start it in October, with the other two following in January. So far, everything is on hold, although it looks like some companies, including AmEx, stopped reporting AU's several weeks ago.
So for the moment, it might well help, but don't count on it to last.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit? FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007