Authorized Users Will Be Allowed in FICO Score Calculation

This is a good news for people with poor credit score or just started building their own credit history.

Last year, when Fair Issac, the creator of FICO credit score, announced that it no longer considers authorized user accounts when calculating FICO score, the action generated quiet some discussions because it affected many people negatively and it’s a common practice to add family members as authorized users to an existing credit card to help them establish their credit. While the change was aimed to prevent people from “buying” other people’s good scores so they can get a favorable interest rate, it also blocked a shortcut for genuine authorized users, such as children or spouse, who have no credit history of their own.

This is about to change again, not because Fair Issac reversed its decision, but its has a new set of formula for future scoring. Fair Issac posted on its website that it has developed a new technology to restore authorized user accounts when calculating FICO 08 scores:

Fair Isaac analysts have created a way to restore authorized user accounts to the calculation of FICO® scores 08, while materially reducing any potential impact to the score from tampering. Fair Isaac is now adding the patent-pending technology advance to its FICO® score formula. Fair Isaac estimates that more than 50 million US consumers are legitimate authorized users on another person’s credit card.

Good news? Definitely, though there’s no word on when FICO 08 score will be available.

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