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
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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
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
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.
holder a fee for brokering these deals. Kind of like "renting" out your good 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.
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.
More Resources
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Get Deletions
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Collection Agencies
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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.
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