Efficacy of Authorized User

[Anonymous]

Adding an AU account is it going to affect your older scores. Whether or not it affects version eight and nine scores depends on whether it’s flagged by the anti-abuse algorithm.

If not it will affect your score there as well.

How it affects depends on how old the account is in relation to your oldest account and other accounts and whether it’s ever had any negatives and what its utilization is.

[Anonymous]

Thanks to both of you for your replies.  i guess whats odd is that the myfico product for fico 8 very clearly says "Authorized User Accounts are aren't considered in the calculation of this attributre" for both revolving utilization and total balance on Revolving and open-ended accounts.  And i can confirm the attributes aren't including the account. Currious if anyone using the MyFico product and has Authorized User Account is seeing something different. 

[Anonymous]

OK let me try to clear up this discrepancy for you. What the algorithm does to give you your score and what the CMS products tell you about your attributes can be vastly different.

When MF or any other CMS tells you accounts are not calculated in this attribute, they are speaking of the results they are giving you, that they are calculating from the data in your credit report. That’s great that they’re adding up and giving you a number. That has nothing, and I mean absolutely nothing to do with what the actual algorithm is using and calculating.
Those are like idiot lights in your dashboard. You cannot count on them..

Let me go a little further. I have an AU account. I also have the same disclaimer you have. But guess what? One of three does in fact include my AU age in the calculation that MF displays that has nothing to do with my real score, that supposedly does not include it.

Anyway, despite that disclaimer, MF is still using my AU age in the calculation of that attribute for one of those bureaus! Just another example of why you should discount any calculations made for you by a CMS.

If you would like to know your ages, go directly to CR data and calculate them yourself. Do not rely on a CMS for anything.

Now, if you would like to know whether or not the actual algorithm takes into account your AU account whenever it calculates your score, you will need to do what has been called An AU efficacy test.

That’s the only way you’re gonna find out if it’s counting for version eight and nine. If you’d like to know more about it let me know and I’ll tell you how to do it.

And yes I spoke about age but the same thing holds true for utilization, balances and everything else. What the CMS tells you it’s simply what their software calculates. That has nothing to do with what the algorithm does. You have to use the actual data not what they already calculated.

They display that for people who either don’t know any better or who are too lazy to do the calculations themselves. It’s really misleading they should put proper disclaimers. And plenty of people have complained about it and they do nothing.

[Anonymous]

That makes perfect sense (although very sloppy on their part).  If you could point me to how to do the calc by hand/excel, i would be grateful. 

Thanks,

[Anonymous]

Ranger98 By the way, welcome to the forum!!

Yes you’re right, it’s very sloppy on their part, sometimes I wonder if it’s intentionally vague or misleading.

Yes, first you must access the actual data from your credit reports. I do not know which monitoring services you have, but if you have MF, open up a 3B and go to accounts and you have to open up each account individually. If you have Experian or CK or whatever, the same thing, you have to actually go to the CR account data and get the opening dates. NO SUMMARY info.

Your AAOA may also vary by bureau, so you have to do this for each bureau, if there are any differences between bureaus. I don’t care what day of the month it falls on, the algorithm assumes it was opened on the first of whatever month it was opened in.

So make a list of all your accounts and the opening dates, making them on the first of the month for the months they were opened in. Then, for each account, count the number of months from its opening to the first of the present month. That’s the account age in months, list it next to each tradeline. Now add them all up and divide them by the number of tradelines. That is your AAOA. ( By the way, aging always occurs on the first of the month, so if you have no other changes on the first you can isolate point changes from aging, (AAOA, AoOA, AoYA).

Personally, I do one calculation like that and then I do one calculation without my AU account. The reason is, as I told you, sometimes AU accounts are not counted in version eight and nine. For instance, mine is not. So you will then have two ages. The age including all tradelines will be good for the 1998 and 2004 algorithms. For version eight and nine, I can’t tell you which one is correct without you doing an efficacy test.

If you’d like to know how to do that, let me know and I’ll explain that as well.