FICO Will Keep Authorized User Accounts

Fair Isaac has changed its mind about removing piggybacked accounts from the FICO score equation.

In 2007, Fair Isaac announced a new credit scoring model - FICO 08 - that would no longer consider authorized user accounts. This decision came on the heels of the mortgage meltdown. You see, many consumers who had bad credit scores, bought better credit scores by paying to be added to someone else's positive credit account. When you're an authorized user on an account, the account's entire history appears on your credit report and is calculated in your credit score. So, some consumers, who wouldn't have otherwise qualified for a mortgage, paid their way to application approval.

In a prepared testimony, Tom Quinn, Vice President of Global Scoring Solutions for Fair Isaac Corporation states:

"After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user tradelines present on the credit report in the FICO 08 model. Our scientists have devised a method to consider these tradelines while materially reducing the negative impact that could arise from piggybacking."

Fair Isaac still plans to roll out FICO 08, though no dates have been communicated.

Related:

• Can You Buy Better Credit?
• New FICO Score Changes Might Cause Lower Scores
• Piggybacking gets stay of execution from FICO, CreditCards.com