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AU Benefits going Buh-Bye

The last post in this topic was posted 4904 days ago. 

 

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As we are all well aware by now, thanks to the abuse of AU accounts from sketchy services, FICO will no longer be factoring in AU accounts into credit scores under the new software (scheduled to roll out beginning in the fall, I believe).

 

Will joint accounts still count toward the score? I have to imagine yes as you are responsible for the debt.

 

My score will tank when my mom's Discover card is no longer a factor as I need the age. I'm so nervous as I'm mortgage shopping and probably won't buy before the new FICOs come around. Since my score is still up right now from the age, I'm wondering if she can switch me to a joint user now--before the hit to my score takes effect, thereby improving my chances of being approved for a joint account--if that will negate the effect when the scoring models change.

 

Anyone know?

 

(P.S. If this turns out to be true, and AU accounts are upping your score, try to go joint now if you can. If you wait until after, your score might be too low to be approved. Just a theory...)

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I just got this email today, and I was wondering if there was a post about it here already..

 

Dear myFICO,

 

I'm trying to build up my credit quickly so I can purchase a new home that I found and absolutely love. I was told the quickest way to raise my FICO score was to be added as an authorized user to someone's credit card who has a long history with on-time payments. Is that true? If so, how would I go about doing that?

 

Renata

Newark, New Jersey

 

 

 

 

Dear Renata,

 

Your question has been a hot topic in the news recently. First a bit of background: FICO® scores originally considered authorized-user accounts because our scientists found that in some cases that information can help us determine a person's credit risk. By coincidence, some people found it also was a way for a parent to help another family member establish a credit history. For example, a parent might add a teenager as an authorized user to an existing credit card account. The teenager could learn how to use the credit card under the watchful eye of the parent, without being financially responsible for the account. Since the bank would report the account history to the teenager's credit bureau file, it also helped the teen start building his or her own credit history.

 

While this practice began with good intentions, recently several websites have begun offering services to boost a FICO score by adding their customer as an authorized user to a complete stranger's credit account in good standing. The customer never actually gains access to the credit account. Instead, the arrangement intentionally misrepresents the customer's own credit history to the FICO scoring formula, as well as to lenders and other businesses. Courts and government agencies have yet to rule on whether this practice is legal. However, to protect FICO scores, Fair Isaac is changing its FICO scoring formula so that it will no longer recognize authorized-user accounts.

 

So, to answer your question: no, we would not recommend that you be added as an authorized user to someone's credit card just to raise your FICO score. However, there are definitely things you should know about your FICO score and establishing your credit history – this free booklet is a good place to start. You might also benefit from hearing what people are saying about establishing credit on the FICO Forums.

 

Trying to buy a home when you have a limited credit history can be difficult, but be wary of web sites stating they can boost your FICO score to help you qualify for the best rates on a mortgage. In fact, some of these sites may be advising you to commit mortgage loan fraud – such as by providing false financial documents in your loan application.

 

Sorry to say, there is no quick solution to building up your credit history – like getting into shape; it takes time and diligence. Hopefully, we've provided some advice to point you in the right direction. Almost as important as knowing the things you can do to establish your credit is knowing the things you shouldn't do! From all of us at myFICO, we wish you success in building your credit and finding your dream home.

 

Sincerely,

myFICO Team

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Joint accounts are very different than an AU account. An AU has NO legal responsibility to pay back the issuer. On a joint account, both parties are equally liable for the charges.

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