Lenders can tell this is an authorized user account for her. If you look closely, there is a part that says "RESPONSIBILITY" which then says "authorized user"
If this were her account it would say "individual." If it were a joint account, it would say "joint."
Lenders don't consider this as her account. But FICO does give her the benefits of the account age, CL, history, etc. And so yes, this is sort of a "cheat" because it does not actually tell anyone if your GF is credit worthy...because she has not personal history to provide this.
But, this is currently a way that she can get a "jump start" on credit. The theory is that if she is a "true" authorized user, then she has access to the account and can actually use it. If she uses it, then the account use represents some credibility to her usage since if her charges are not timely paid, then the account will negatively reflect the non-payment.
The debate is: is she really an authorized user? Does she have a card that she is authorized to use, and does she use it? If not, then she isn't actually an authorized "USER" she is "PIGGY BACK" as you put it. Authorized users are "users" of the account and this means the tradeline history will reflect their use in addition to primary accountholder use.
This is the dilema that FICO has: How to distinguish true authorized users from "piggy back" trade lines. At one point FICO was going to remove AU's from scoring consideration. They reconsidered this, but the understanding is they are looking at ways to validate true AU's from piggy back. That seems to be a tall order.
Message Edited by txjohn on 12-03-2009 07:23 AM
