Authorized User Credit or Piggyback
Credit remains a part FICO 08 scoring
by Lisa Phillips
September 2008
Credit remains a part FICO 08 scoring
by Lisa Phillips
September 2008
| Copyright RebuildCreditScores 2010 All Rights Reserved |
Links
Traditionally, authorized user accounts have been used when
spouses add one another to their already established credit
accounts or parents add their children to their accounts. In recent
years, companies have emerged that offer authorized user
accounts for a price.
Basically the primary account holder would allow a limited number of
unknown authorized users to be added to their good credit
accounts and the company would pay the primary account holder a
fee for brokering these deals. Kind of like "renting" out your good
spouses add one another to their already established credit
accounts or parents add their children to their accounts. In recent
years, companies have emerged that offer authorized user
accounts for a price.
Basically the primary account holder would allow a limited number of
unknown authorized users to be added to their good credit
accounts and the company would pay the primary account holder a
fee for brokering these deals. Kind of like "renting" out your good
In 2007 there was a lot of talk about the end of authorized user
credit also known as piggyback credit, as a means to boost credit
scores. In June 2007, Fair Isaac Corporation (FICO) announced they
were rolling out a new credit scoring model that did not factor in
authorized user accounts.
credit also known as piggyback credit, as a means to boost credit
scores. In June 2007, Fair Isaac Corporation (FICO) announced they
were rolling out a new credit scoring model that did not factor in
authorized user accounts.
The benefits of becoming an
authorized user is the primary
account holder's credit could
improve the authorized user's
credit scores and help build a
solid credit history.
The primary account holder has
to have a good history of
on-time regular payments. In
the alternative, if the primary
account holder was to be late
paying that would reflect on the
authorized user also.
authorized user is the primary
account holder's credit could
improve the authorized user's
credit scores and help build a
solid credit history.
The primary account holder has
to have a good history of
on-time regular payments. In
the alternative, if the primary
account holder was to be late
paying that would reflect on the
authorized user also.
credit for a limited term and getting paid for it. The auhtorized user would not actually get use
of the credit account; however they would get the benefits of the primary account holder's
good credit history. The authorized user would be added for a short period of time in order to
add a quick boost to their credit scores. Some of these accounts would be more than 20 years
old with excellent payment history and very low balances, something FICO scoring looks kindly
upon. According to Fair Isaac Corporation, there are more than 50 million authorized user
account holders.
The industry of purchasing authorized user accounts began to get attention and in response
to the growing use of authorized user or piggyback accounts Fair Isaac Corporation
developed a new scoring model that did not include authorized user accounts in the scoring
model.
FICO 08 was to begin some time in 2008 and all the major credit bureaus were to begin using
the new scoring model. However, critics have expressed that FICO 08 would be in violation of
the Equal Credit Opportunity Act which requires lenders to consider a spouse's credit history
when determining the credit risk of a borrower. Utilizing FICO 08 would prohibit lenders from
complying with the Equal Credit Opportunity Act.
Fair Isaac Corporation has since revised FICO 08 to include the use of authorized user
accounts; however, they now say it has a way to recognize the abuse of authorized user
accounts. Stay tuned for further develops, but for now, it looks as though authorized user and
piggyback credit is still a viable option in boosting credit scores.
of the credit account; however they would get the benefits of the primary account holder's
good credit history. The authorized user would be added for a short period of time in order to
add a quick boost to their credit scores. Some of these accounts would be more than 20 years
old with excellent payment history and very low balances, something FICO scoring looks kindly
upon. According to Fair Isaac Corporation, there are more than 50 million authorized user
account holders.
The industry of purchasing authorized user accounts began to get attention and in response
to the growing use of authorized user or piggyback accounts Fair Isaac Corporation
developed a new scoring model that did not include authorized user accounts in the scoring
model.
FICO 08 was to begin some time in 2008 and all the major credit bureaus were to begin using
the new scoring model. However, critics have expressed that FICO 08 would be in violation of
the Equal Credit Opportunity Act which requires lenders to consider a spouse's credit history
when determining the credit risk of a borrower. Utilizing FICO 08 would prohibit lenders from
complying with the Equal Credit Opportunity Act.
Fair Isaac Corporation has since revised FICO 08 to include the use of authorized user
accounts; however, they now say it has a way to recognize the abuse of authorized user
accounts. Stay tuned for further develops, but for now, it looks as though authorized user and
piggyback credit is still a viable option in boosting credit scores.
More Resources
Rebuild Scores
Tips to improve and rebuild
credit scores over time.
Get Deletions
Get a deletion, paid collections
do not raise your credit score.
Collection Agencies
Effectively deal with Collection
Agencies and Debt Collectors.
Tips to improve and rebuild
credit scores over time.
Get Deletions
Get a deletion, paid collections
do not raise your credit score.
Collection Agencies
Effectively deal with Collection
Agencies and Debt Collectors.
 |
 |
 |
 |
|
 |
|
 |
|
 |
|
 |
|
 |
 |
