Credit Repair and the End of Authorized User Accounts

Credit Repair InsightCredit Repair, or is it?
Authorized user accounts have long been the subjectSo you can image the concern that lenders felt as
of debate in credit repair circles. These accounts canthey discovered that pseudo credit repair companies
boost your credit scores, but is it fraud? A creditwere popping up on the Internet selling these
repair expert provides excellent insight into theaccounts to anyone with the money to pay. In
recent resolution of this controversial issue. Commonresponse, Fair Isaac went to work to modify their
Practicecomputer model to block the benefit of these
It is a common practice for parents to give a child aaccounts, and to end to the distortion being caused
credit card. It's good for emergencies and handy forby credit repair card sellers. And so they rewrote the
everything from summer camp to college life. It ismodel and introduced it as FICO '07. But there was a
also common for one spouse to make the otherproblem.
spouse an additional card member.The Credit Repair Battle Continues
A Little Software BugAs much as lenders wanted to eliminate the score
None of these practices are even slightlydistortion caused by authorized user accounts, they
questionable. Additional card member accounts didn'twere unable to implement FICO '07. It seems that
attract the attention of lenders or Fair Isaacthere is a paragraph in the Equal Credit Opportunity
Corporation, the creator of the credit-scoring modelAct (ECOA) that states that, "when lenders assess a
used by lenders when they make credit decisions,spouse's credit risk they are required by law to
until they noticed an interesting bug in theconsider the credit history of accounts which both
credit-scoring model which was to spawn aspouses are permitted to use."
questionable little sub-business in the credit repairBack to the Drawing Board
industry.This little directive stopped FICO '07 in its tracks and
A Cool Credit Repair Tricksent Fair Isaac back to the drawing board. For those
It seems that as soon as the new account appearedof us in the credit repair business, we were amused
on the credit report of the beneficiary their creditto see the fanfare amongst the brokers of these
score would jump. In other words they wereauthorized user cards that trumpeted FICO '07 as
inheriting the credit history of the card from the"illegal", and of course continued to sell their
donor. In the case where the donor had excellentquestionable credit repair product to the public. Their
credit the beneficiary discovered their own creditcelebration, however, was short lived.
score jumping significantly, often over one hundredCredit Repair Card Brokers Say Goodbye
points, a cool little credit repair trick, but not whatOn July 31, 2008, Fair Isaac announced their final
Fair Isaac really had in mind.solution. They have managed to create a way to
Word Spread Quicklyblock questionable authorized user accounts from
Well, the word quickly spread. And as alwaysinheriting the score benefit of the donor without
happens, creative entrepreneurs thought up a wayblocking those of spouses and family members. So
to package this small credit repair miracle and sell it tofinally the death blow was dealt against the shadowy
absolutely anyone who had the money and desire tocredit repair businesses selling their quick fixes.
give their credit score a quick, albeit undeservedThose Amazing Brainiacs
boost. And it is this undeserved issue that becameThe exact language of the press release reads, "We
the real problem.have developed technology that will reduce any
FICO in our Lifeimpact on the FICO 08 score from intentional
In 1989 Fair Isaac Corporation first made their FICOtampering, while allowing the scores of spouses and
credit scores available to lenders. And in 1995 theother genuine authorized users to benefit from their
mortgage lending giants, Fannie-Mae and Freddie-Macshared credit experience." How this works, I can't
made FICO scores a part of their mortgagesay, but my hat is off to the brainiacs at Fair Isaac.
underwriting consideration. Since that time lendersCredit Repair the Right Way
have become virtually dependant on Fair Isaac'sIntentional distortion of the validity of credit scores
scoring model, and the credit repair services began towas good for no one. Intelligent credit repair never
focus on these powerful little numbers.requires questionable practices. There have always
Score Distortionbeen many legal and powerful ways to boost your
The reliability of these important numbers is essentialcredit score, quickly and effectively. A well-planned
to good decisions. If something were to threaten theapproach to credit repair has always produced real
validity of the FICO score undeserving borrowersand lasting results that endure and truly reflect your
would be able to obtain loans they did not deserve.own credit worthiness. Do it right, and do it for real.
Lenders making these loans would be in jeopardy ofCopyright © 2008 James W. Kemish. All
increasing default rates and potentially disastrousContent. All Rights Reserved.
losses.