topic Authorized User Question.. in Understanding FICO® Scoring

Authorized User Question..

Anonymous — Thu, 15 Nov 2007 03:15:47 GMT

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??

Re: Authorized User Question..

Anonymous — Thu, 15 Nov 2007 03:23:11 GMT

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.

Re: Authorized User Question..

haulingthescoreup — Thu, 15 Nov 2007 05:19:10 GMT

Great summary!

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.

Re: Authorized User Question..

creditwatcher — Thu, 15 Nov 2007 17:28:28 GMT

I was added as an authorized user to an AMEX account (27k TL with 20% UTL and 4 year history) in July and it actually showed up on my Equifax report yesterday! Weird, wasn't expecting it do that....

EDIT: The account showed up on my TU CR today. Guess they are still actively reporting AU's!

Message Edited by creditwatcher on 11-15-2007 09:28 AM