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AU effect on AAoA FICO 08

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Valued Contributor

Re: AU effect on AAoA FICO 08

@Everyone: So if I do this test and find out it’s not counting as I suspect, there’s nothing I can do to make it count is there? Considering we (primary &I) have the same address and have for over 25 years I don’t know what the algorithm could be using to discriminate between artificial and authentic use. Last name possibly? They are different....
Any ideas anyone? BTW, thank you everyone for their comments and it will be a minute before I can pay off the balances to attempt such a test, but if and when I do I will report back with the results.




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 11 of 24
Super Contributor

Re: AU effect on AAoA FICO 08


@Birdman7 wrote:
@BBS, It will bring up my AAoA by a year, and that would help. For some reason I don’t see the include quote button, so forgive my failure to include your quote.

A difference of 1 year AAoA is pretty insignificant the greater your AAoA is.  If you're talking 1 year verses 2 years, it matters a lot more than 6 years verses 7 years, for example.  What is your AAoA with the AU account present (if it even counts) and what is it without it?  Keep in mind that many believe that once one reaches an AAoA of 7 years 8 months give or take that no further FICO benefit can be realized from a greater AAoA.

Message 12 of 24
Valued Contributor

Re: AU effect on AAoA FICO 08


@BrutalBodyShots wrote:

@Birdman7 wrote:
@BBS, It will bring up my AAoA by a year, and that would help. For some reason I don’t see the include quote button, so forgive my failure to include your quote.

A difference of 1 year AAoA is pretty insignificant the greater your AAoA is.  If you're talking 1 year verses 2 years, it matters a lot more than 6 years verses 7 years, for example.  What is your AAoA with the AU account present (if it even counts) and what is it without it?  Keep in mind that many believe that once one reaches an AAoA of 7 years 8 months give or take that no further FICO benefit can be realized from a greater AAoA.


I actually was just updating my signature .... my AAoAs are 6, 5, and 5 without the AU account; with the AU account, they are 7, 6, and 6. I was of the impression that I would receive maximum benefit at 7 years, so I am trying to get there! Smiley Happy




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 13 of 24
Super Contributor

Re: AU effect on AAoA FICO 08

I honestly wouldn't waste my time if I were you with that AU account, because the scoring benefit of an AAoA of 5-6 years verses 6-7 years IMO isn't significant.  Maybe 5 points, absolute max 10 points.  Your oldest account is > 40 years, so your AoOA cannot be impacted by the AU account and that's what matters most as it's a factor in score card assignment.  If I were you I'd drop the AU account all together, as it's not worth the time to stress about it.

Message 14 of 24
Valued Contributor

Re: AU effect on AAoA FICO 08

@BBS: You are probably correct although I’ve held out hope of having it converted to a joint account so that I can take it over. However Dillards is rather stubborn, dog gone it.




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 15 of 24
Established Contributor

Re: AU effect on AAoA FICO 08

Two things on authorized user accounts. They are for spouse to spouse or parent to their children to help them with credit. Any other person would not be calculated into the scoring algorithm. And I have talked to a few lenders about these types of accounts and this is what they had to say.

 

We will not use authorized user accounts by themselves to which they will be treated as new credit or having no prior credit If that is all they have. The reason being is we cannot determine their level of credit risk or worthiness because they have made no payments and are not responsible for the account. So compared to the actual account holder who has qualified for a credit card, loan, or mortgage, we need to see consistent payments that are being made on time. If credit were to be handed out to anyone that has not proved through their own actions of payments there would be other issues that would come up. There is also regulations that have to be met. The best thing to do when adding only your spouse or immediate child as an authorized user to boost their score, is to cosign for them, have them get a secured credit card, or request credit on their own when they are new to credit. In other words do not let the only thing on their credit report be an authorized user because that Tradeline by itself will be ignored. And on a last note the credit score needs to be backed up with their own information on the credit report, not piggybacking off of another credit report or the other perosn's credit rating. 

 

So there you have it.The credit score is only a part of it. The rest of it is the creditors and underwriters

Message 16 of 24
Valued Contributor

Re: AU effect on AAoA FICO 08

Good info CreditBob! I wonder if the algorithm uses last name as a discriminant? Tho the primary is family and has the same addy, last name is different....anyone have an AU count with different last names?




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 17 of 24
Super Contributor

Re: AU effect on AAoA FICO 08


@CreditBob wrote:

Two things on authorized user accounts. They are for spouse to spouse or parent to their children to help them with credit. Any other person would not be calculated into the scoring algorithm....

 

... do not let the only thing on their credit report be an authorized user because that Tradeline by itself will be ignored. And on a last note the credit score needs to be backed up with their own information on the credit report, not piggybacking off of another credit report or the other perosn's credit rating.


Hi Bob!  None of those things (above) are true.

 

We have many confirmed cases of other people besides spouses or children of parents getting the full scoring advantage of an AU account (for FICO 8).  As Revelate explained earlier, there's no way to be certain even in the case of a spouse or parent-child relationship that the anti-abuse algorithm won't erroneously classify the AU card as an invalid AU and exclude it from scoring.  But in general we have seen cases of siblings, roommates, and even friends without a shared name or address. 

 

Furthermore, the anti-abuse algorithm is only active for FICO 8 and later.  The mortgage scoring models accept any AU account.

 

And finally the classic use of an AU account is in the case of a person who has no accounts of any kind of his report.  The AU account is added and he instantly gets a great score (assuming an old card with no lates and a very low balance).  Then, with exactly one account (the AU card) he leverages that score to begin obtaining cards of his own.  So having a report where the sole account is an AU card does not preclude the AU from getting a strong scoring benefit from it (and using that score to get approvals for his own cards).

 

 

 

Message 18 of 24
Valued Contributor

Re: AU effect on AAoA FICO 08


@CreditGuyInDixie wrote:

@CreditBob wrote:

Two things on authorized user accounts. They are for spouse to spouse or parent to their children to help them with credit. Any other person would not be calculated into the scoring algorithm....

 

... do not let the only thing on their credit report be an authorized user because that Tradeline by itself will be ignored. And on a last note the credit score needs to be backed up with their own information on the credit report, not piggybacking off of another credit report or the other perosn's credit rating.


Hi Bob!  None of those things (above) are true.

 

We have many confirmed cases of other people besides spouses or children of parents getting the full scoring advantage of an AU account (for FICO 8).  As Revelate explained earlier, there's no way to be certain even in the case of a spouse or parent-child relationship that the anti-abuse algorithm won't erroneously classify the AU card as an invalid AU and exclude it from scoring.  But in general we have seen cases of siblings, roommates, and even friends without a shared name or address. 

 

Furthermore, the anti-abuse algorithm is only active for FICO 8 and later.  The mortgage scoring models accept any AU account.

 

And finally the classic use of an AU account is in the case of a person who has no accounts of any kind of his report.  The AU account is added and he instantly gets a great score (assuming an old card with no lates and a very low balance).  Then, with exactly one account (the AU card) he leverages that score to begin obtaining cards of his own.  So having a report where the sole account is an AU card does not preclude the AU from getting a strong scoring benefit from it (and using that score to get approvals for his own cards).

 

 

 


Wow!, I love this forum already! I am learning so much from everyone, and I wanna take the time to thank everyone for their time and assistance in contributing to this and all threads. I love the differing viewpoints and how we help each other; awesome! @CGID: Thank you for confirming the anti-abuse algorithm does not use name is a discriminant. Are there any threads you can refer me to? If it's not name or address, I wonder how the algorithm works.....Thanks for the pointer it does not affect mortgage scores! Any other insight from anyone?




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 19 of 24
Valued Contributor

Re: AU effect on AAoA FICO 08

I made an observation that I wanted to point out that supports BBS’s viewpoint about the front end fluff software. I also have an Experian account and on there I can find the average age of my accounts calculated both with and without benefit of the AU account, depending on where on the website I look. So that causes me to again ponder whether or not it counts and I’m going to end up having to do the test to find out. Question: is there any discrimination between bankcard and retail card? For these purposes, as the AU account is a retail card.




Considering BBVA and 5% cards. (Forgive typos, mobile.)(Everything said is Just IMHO.)
Message 20 of 24