topic Re: Authorized user used to boost score. in Understanding FICO® Scoring

Authorized user used to boost score.

Lasardo — Sun, 03 Jun 2012 14:43:26 GMT

I was advised to post my question on the credit card side, I was told you guys are experts so here goes.... I am trying to rebuild my credit. I opened 2 secured cards from cap 1 and 1 unsecured from First premier (only ones that would give me credit) My friend put me on their Amex and my score jumped overnight 30 points. I need additional points so they are planning to add me to their oldest accnt, JCpenny. My understanding is I need to be on their for 6 months at least for their GOOD credit history even impacts me . Will a department store card even make much of a difference. When I try to take out a loan will being on someone else's accnt come into question? Any and all advise welcome.

(Moved here to Understanding FICO Scoring for best response, as question is primarily about scoring effects of AUs/credit cards. - Scamp, Mod)

Re: Authorized user used to boost score.

llecs — Sun, 03 Jun 2012 16:02:53 GMT

If the JCP is added, it doesn't need to be on there for 6 months to add the history. When the AU is added, it is instant history (provided it isn't brand new).

Adding it really won't improve the mix due to the Amex (assuming it's a charge). It can improve your overall length of history and/or AAoA if old. If the CC is years old and free of baddies, then as far as FICO is concerned, the day you add it is will be scored as a very old account free from blemishes.

CC utilization also would be an impact when adding an AU.

YMMV on the loan. If FICO is used only, then the AU will be viewed just as if it were yours. If under a manual review, they might call it into question. If they use their own internal score, like GECRB, then they can choose whether or not to include AUs.

Re: Authorized user used to boost score.

RobertEG — Sun, 03 Jun 2012 20:25:40 GMT

If a credtior chooses to do a manual review of your credit report, there is a reason. They are looking for more than just a three-digit credit score.

Seeing the credit history of another as part of your data for score calculation would obviously bring into question the amount of score "inflation" (or even deflation) caused by that history. If they then wish to use a FICO score that reflects only your own, personal risk based on your own history, they simply have no way to do that. They cant run their own FICO score, isolating that history.

Of course, the amount they might discount your score in their decision-making is up to them. But it might be a factor.

Re: Authorized user used to boost score.

Anonymous — Mon, 04 Jun 2012 01:45:02 GMT

Does it affect the person allowing you to be added on?

Re: Authorized user used to boost score.

llecs — Mon, 04 Jun 2012 02:02:07 GMT

@Anonymous wrote:
Does it affect the person allowing you to be added on?

Not at all, unless the AU runs up the CC and fails to pay it.

Re: Authorized user used to boost score.

AndySoCal — Mon, 04 Jun 2012 03:34:15 GMT

The impact of an authorized user account depends on which FICO model that is being used IE FICO08, Beacon 9 etc.

If is FICO 08 the amount of the increase (if any) would not be same as older versions of the FICO score. Please refer the FICO 08 specs on FICO's website.

Re: Authorized user used to boost score.

Revelate — Mon, 04 Jun 2012 07:04:15 GMT

@AndySoCal wrote:
The impact of an authorized user account depends on which FICO model that is being used IE FICO08, Beacon 9 etc.
If is FICO 08 the amount of the increase (if any) would not be same as older versions of the FICO score. Please refer the FICO 08 specs on FICO's website.

I don't think that's unilaterally correct and impossible to prove regardless based on the anecdotal evidence on this forum or by what FICO themselves have stated from what I've read. If you have a specific announcement from Fair Issac I'd be interested in reading it especially if I'm incorrect on this point.

They backed off the complete airstrike of AU's in the FICO '08 model, and the artificial score deflation that would occur in the give or take 1-2M users who were legitimate AU accounts (spouses pimarily and perhaps adult children) and who would have no FICO score if not for those. There was some blurb about the algorithm's only taking reasonable AU accounts into consideration in an attempt to prevent the abuse of selling tradelines which occurred under the older models; however, this is probably in conjunction with the lenders' reporting I'd estimate as I don't know if FICO or anyone else has any capability to look at multiple datasets in a single lookup without violating various privacy constraints. Even a joint or co-signed application is two separate pulls from an approval perspective, with both parties consent.

Re: Authorized user used to boost score.

AndySoCal — Tue, 05 Jun 2012 01:35:10 GMT

Revelate,

Click on the link below then scroll down doe proection from authorized user abuse.

http://www.fico.com/en/Products/Scoring/Pages/FICO-score.aspx

Re: Authorized user used to boost score.

Lasardo — Tue, 05 Jun 2012 04:32:21 GMT

I posted this question 2x , apologies, still learning. I did not select the "email me when someone replies" on this particular post.. please delete This post.

Re: Authorized user used to boost score.

Revelate — Tue, 05 Jun 2012 14:47:59 GMT

@AndySoCal wrote:

Revelate,

Click on the link below then scroll down doe proection from authorized user abuse.

http://www.fico.com/en/Products/Scoring/Pages/FICO-score.aspx

I can't find that on the page?

I know what FICO released to the press around the FICO 8 / AU-ignore retraction. I know that they said they had something in place to allow legitimate AU's to be counted (family members, spouses certainly, are legitimate uses) but some unannounced (go figure!) method of preventing the more abusive scenarios, but did they post something more specific on that?

Re: Authorized user used to boost score.

pizzadude — Tue, 05 Jun 2012 14:57:32 GMT

If you download the FICO8 product sheet on that website, you'll see a section "Protection from Authorized User Abuse".

The FICO8 Score also includes a modification designed to help protect lenders from authorized user abuse....

Re: Authorized user used to boost score.

Revelate — Tue, 05 Jun 2012 21:24:53 GMT

@pizzadude wrote:

If you download the FICO8 product sheet on that website, you'll see a section "Protection from Authorized User Abuse".

The FICO8 Score also includes a modification designed to help protect lenders from authorized user abuse....

Right, and combine that with their press release (that they refactored that to not impact *legitimate* AU's) and how's it any different than what I stated earlier?

Re: Authorized user used to boost score.

AndySoCal — Wed, 06 Jun 2012 01:38:20 GMT

Click on the FICO product Fact sheet. IE the PDF link on the left hand side.

Re: Authorized user used to boost score.

Anonymous — Thu, 07 Jun 2012 15:24:12 GMT

I was under the impression that the Equal Credit Opportunity Act forbade banks from ignoring Authorized User accounts in the scoring model...? Regulation B, Section 6...Google: Boost My Score and click on Articles/Recent News. FICO conceded to Congress that they would continue to consider the tradelines in a testimony to Congress in August 2009...no?

Re: Authorized user used to boost score.

pizzadude — Thu, 07 Jun 2012 15:33:00 GMT

@Anonymous wrote:
I was under the impression that the Equal Credit Opportunity Act forbade banks from ignoring Authorized User accounts in the scoring model...? Regulation B, Section 6...Google: Boost My Score and click on Articles/Recent News. FICO conceded to Congress that they would continue to consider the tradelines in a testimony to Congress in August 2009...no?

The product sheet mentions that AUs are still includeds....however they state they they have built some kind of "AU fraud protection" into the calculations so that people who are piggybacking AU accounts ( non~relatives maybe...) may not see those accounts reflect in their FICO8 score.

Re: Authorized user used to boost score.

Anonymous — Thu, 07 Jun 2012 15:52:18 GMT

But it's not like the credit reports track who is/isn't related to whom to restrict unrelated AU's receiving the benefit from people paid for adding them to their credit cards. Right? The reports carry only very generic information. Do you think that this ambiguous "fraud protection" is just another PR tactic on FICO's part to scare consumers away from the practice because there isn't anything they can legally do to stop it? Even if the model could somehow choose to ignore an AU account from an unrelated primary, ignoring it would be illegal for a bank, according to ECOA. If an AU line is on the report, the score cannot ignore it. I believe that you are correct, however, in stating that if the application went into manual review, the underwriter could easily kick it out for the lack of primary activity, or some other reason, but couldn't legally decline based solely on the appearance of AU accounts. As far as the original poster in this thread is concerned, I think they are doing the perfect thing. Adding AU accounts from a friend AND applying for 2-3 HR tradelines of their own. Once the primary lines applied for season for 6 months, or so, they should be able to have everything in place for a lender to approve them for whatever loan their income can support.

Re: Authorized user used to boost score.

Anonymous — Thu, 07 Jun 2012 15:54:03 GMT

Another thought... There aren't any mprtgage lenders out there using FICO8 because it wasn't approved by Fannie/Freddie, right?

Re: Authorized user used to boost score.

pizzadude — Thu, 07 Jun 2012 16:16:37 GMT

@Anonymous wrote:
Another thought... There aren't any mprtgage lenders out there using FICO8 because it wasn't approved by Fannie/Freddie, right?

I honestly don't know how ( or even if ) the scientists at FICO implemeted the "authorized user abuse" scoring, I'm just trying to intrepret what the product sheet describes. If they are checking AUs then very likely it is done via cross matching of accounts with names/address/etc...

I believe you are right about mortage lenders.....as far as I know the standard is the FICO04 scoring version.

Re: Authorized user used to boost score.

Anonymous — Thu, 07 Jun 2012 18:25:00 GMT

Thanks for your input. I really appreciate it. Although, when an AU tradeline appears on a credit report, the billing address appears with it...

Re: Authorized user used to boost score.

Anonymous — Thu, 07 Jun 2012 19:44:18 GMT

I don't see how the FICO08 credit scoring model can determine who has a "valid" authorized user account from a sponse or parent to a child. What happens if to a daughter's AU account from her father when she moves to a differrent state and get married. If they are cross reference her name and address it's not going to match. I don't see a way of them successfully determining a "valid" authorized user account.