nal Student - What can I do to improve my credit?
10-27-2012 01:01 PM
Good advice, but hasn't FICO recently stopped considering AU accounts in their scoring model?
No, AUs are fully counted. At one point they made an announcement that they would limit AUs after pressure from lenders. Many lenders were experiencing heavy losses because borrowers would artifically prop their reports with purchased TLs, and then would default after borrowing money. FICO made a move to stop that by limiting AUs on the newest FICO versions only (hardly anyone are using them now so it probably wouldn't matter anyway). After a review of the Equal Credit Opportunity Act, FICO backed away from that AU claim for fear that spouses without any credit could be harmed with this change. AUs are scored in the newest versions. Lenders can still decide though who or what they allow within the reports though. There are some examples in here of mortgage lenders asking borrowers to remove AUs.
That's great news! Thanks for the demystifying!!!