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FICO Score To Drop Authorized User Information
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Fair Isaac Corp. has decided to remove authorized user information when it comes to computing your credit score, likely a response to one recent scheme that had credit worthy users “renting out” their credit history to those without it. If you try to game the system, it’ll adjust itself – it’s as simple as that. The downside is that being put on as an authorized user, such as a child being put as an authorized user on their parent’s credit card, used to be a great way for someone to develop their credit history. Unfortunately, one of those arguably legitimate methods for building your credit has been wiped away because a few (actually many) greedy souls rented out their good names for a few hundred bucks.
If you’re one of those folks paying to improve your credit, unfortunately you’ll have to go back to improving your score the old fashioned way – fiscal discipline. Some would say that there is no difference between paying to get added as an authorized user and getting added because you know someone or are their son/daughter. I suppose from a superficial perspective that is the case, the person who has bad or no credit is trying to boost their score with some help. I think it’s two totally different situations because in one situation there is money changing hands.
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The ones who will really suffer are spouses. Credit card companies havn’t issued joint credit cards in a long time, so households where all the credit cards are in one person’s name will have the other person’s credit rating slashed. This is troublesome if the primary card holder dies or the relationship heads for divorce.
Mike
Do you know if this will be retroactive? Several years ago my parents did this unintentionally when I was traveling to Europe. I had a nice credit score by the time I went to buy my first car. I wonder if my score will drop now.