Vote: Do You Think the FICO Score Change is Fair?

Fair Isaac announced that they're no longer going to include authorized user accounts in their FICO credit score calculations starting this fall. Our team of credit experts created a detailed article to explain exactly what this FICO algorithm change means to your credit.

The FICO formula change was designed to stop credit repair fraudsters from selling access to established credit accounts, a practice called "piggybacking." However, 30% of the US population has at least one authorized user credit card account on their credit files. The score change will likely lower this group's credit scores fairly significantly. It will also make it harder for new consumers to establish their credit.

Given the benefits (stopping credit repair fraud) and the negatives (damaging credit scores), do you think the FICO credit score formula change is fair? Vote today:

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Feel free to share your feedback in the comments section below. And if you have a question about the FICO score change, you can email us anytime.

Comments

[Elana]

I think it has its uses, specifically for helping family members who have had trouble in the past or have no credit to build credit, not for companies to illegally take advantage of. I think the way to manage this would be for credit card companies to change the rules for authorized users (family members only) rather than eliminating it from the FICO completely.

I personally use this for my fianc.

I called Capital One a few weeks ago because I got fed up with Bank of America (long story) to add him as an auth. user and transfer all my BoA balances. After I made the balance transfer the very next question I was asked was if I wanted to add an authorized user.

In order to fix this, the credit card companies really needed to take responsibility for this if it bothered them. It's their own fault people abused the system with the attitude they were displaying. I can't really blame FICO for changing their model.

So, yes, my suggestion would change the advantages I made or my fianc until we're married, but I'm trying to help him improve our credit for BOTH of us. It's an advantage to me, who has a good score, for him to better his score when we attempt to purchase a house next year.

So, they result of this will be me setting up a joint account for us with my oldest card (that's not BoA) for myself and my husband as soon as we're married.

[Plutocraces]

This practice is discriminatory against women. I can't wait for the lawsuits that will pop up out of this over gender discrimination.

It is also collective punishment for the transgressions of a very small group of people attempting to game the system (which has no adverse effect on the rest of us).

No one supports this and you should start to realize that. People support other people's ability to repair their credit. We all sympathize. We may not go to the extremes of the people who pay to piggyback, but we damned well support their right to do whatever humanly possible to repair their credit.

This change is only being made to the benefit of the creditor. Don't sell it like it is a good thing for the rest of us.

[John Ulzheimer]

Nice posts. I wanted to comment on these so others can learn from our discussion.

Elana's plan is a good one, but she's talking to the wrong credit card company. Her plan is to x-fer balances from a BofA card to a CapOne card and then eventually add her fiance as a joint cardholder.

The problem is that Cap does not report accurate credit limits so this move could actually lower her scores and her fiance's scores.

Elana - I'd use a different credit card issuer. Same strategy though.

Pluto's post is right and wrong, but not that wrong. FICO isn't discriminating against women since their scores are "gender blind." It just happens that women are authorized users more often than men so they will be impacted at a higher frequency.

But I am with her 100% when she says "it is a collective punishment for the transgressions of a very small group of people attempting to game the system."

Creditors can fix this problem but they haven't. The result is a messed up fix like what will happen starting later this year.

Keep 'em coming!!

[Elana]

I don't have this problem with my CapOne card, actually because when I opened it, I transferred the full amount up to my limit onto this card (plus actually a little extra), so my high balance actually reads $10 more than my actual limits in this case (I've long since paid off that amount). I'm using this card because it's offering a low purchase APR (6.99%!) which makes it a good financial deal.

[mike]

This whole thing is just another insult to the american people. It never ceases to amaze me that the credit industry can find and develop ways to punish virtually everyone for the "sins" of a few. Sins, I might add that they have been complicit in for many years. Now it is time to punish ALL, and complicate and probably push an already fragile mortgage industry over the edge. Please think of the BILLIONS of dollars that have already been made and noe with an underwhelming estimate of 30% of the consumers in America facing a dramatic drop in their FICO score. The only outcome is more BILLIONS for the lending industry is there is one left, and financial ruin for millions of already struggling American families. This is all about money as usual, taking it from you...

[Mike]

Wait until the Gay community hears about this. Is is singularly the best way they have of building credit as a Domestic union or partnership. By the way it is the same for heterosexual couples as well. This might start a financial revolution that proves, finally, you are no greater risk to repay a loan by the arbitrary number given to you by some faceless company that is sleeping with the credit issuers and lenders!!

[arthur]

I think there should be a law put in place to not allow members outside of immediate family to be added on as authorized users and it should be against the law for credit repair companies to collect fees for referring people to individuals looking to sell their established credit to others. We shouldn't all suffer from bad practices of a few!!!

[arthur]

I think there should be a law put in place to not allow members outside of immediate family to be added on as authorized users and it should be against the law for credit repair companies to collect fees for referring people to individuals looking to sell their established credit to others. We shouldn't all suffer from bad practices of a few!!!

I was just added on two months ago to my fiance's credit card and saw my score jump up 50 points. I didn't even think that her accounts would show up under my name. We weren't even thinking that it would go on my credit we just thought it would give me access to her creidt card. I was just starting to get excited about re-establishing my credit. Well it looks like I have a little less than a year to take advantage of this.

Hopefully I'll be above 720 by then!!!

[t smith]

Why is fair issac so concerned about people gaining a few points. They have a system set up to punishment one credit for every little mistake. I worked for the credit industry and they take in to effect 88 things that can hurt you credit while only 6 will help you. How could any one that has negative information ever regain a great score. It would take you years to gain a hundred points while 1 month to destroy it. Not to talk about how long it takes the bureau to fix mistakes. MISTAKES AND PROTECTING PEOPLE FROM INDENTY THEFT should be what they should be working on. How can they just change there system so quickly without govt. approval, I bet the govt. has had 10 fold the complaints about mistakes and the time it takes somebody to re-establish credit after a identity theft.s compared to complaints about a few people getting there scores increased and getting a rate they don’t deserve. SOMETHING NEEDS TO BE DONE ABOUT THIS NON GOVT REGULATED INDUSTRY THAT AFFECTS THE WHOLE COUNTRY. Is there any groups out there we can support to help decrease the power of the bureau its modern day economic slavery America needs to wake up this economic HITLER(FAIR ISSAC).

[Slavery]

Look just bring back slavery. At least I could see who my owner is that is suppressing me and my family.

[F. Knights]

I definitely agree that this credit scoring system that has been created should be gov't-regulated and I also agree that it takes a long time to remove blemishes from your score.

I received 4 credit cards in college (after signing up for free gifts I wanted) and bought books, pizza, chinese food, etc for the better part of 4 years. Then I paid them all off when I left school because I was usually late on payments. After I paid them off, it read, "CLOSED BY CONSUMER" and my credit and my score dropped.

Since then, I've gotten hell from cars dealers, mortgage companies, credit card issuers, etc. because my score is too low but my "income looks good".

I've had to get my Dodge in a friends' name to save $270/month, my house in another friends' name to save $500/month. So now, I'm making payments and helping their credit. It sucks for me because I'm 29 and have no open trade lines but what's of greater importance to me? - to save, literally, thousands/month or pay extra costs to re-establish credit I f'd up when I was 18.

It's hard to win this FICO game and how is what I'm doing any different from piggybacking? I'm using other people's credit to buy things at lower costs. things that I need. Besides, if you're credit really sucks, piggybacking won't do much anyway.

my2cents.

[IDABELLE PARKER]

IN MY EXPERIENCE, ITS THE SAME "OLD GAME OF RED LINING" OR WITH HOLDING IN CERTAIN AREAS,ZONES,COMMUNITIES, ETC.
ITS APARTHIED POLICIES-FAST FORWARD & IN YOUR FACE WITH A BACKWARD TWIST! IT'S A FRESH APPROACH OF MONOPOLY PLAYERS.SEALING THE FATE OF THE RE-ACTORS/REACTRESS IN AMERICAN ECONOMIC RACE THAT MATTERS NOT OR A SUNOMIC SWEEP OF ALL OTHERS AIMED AT THE SEPARATE BUT EQUAL DOGMA OF THOSE STEPPING ON TERRORIST BACK TO KEEP UP CONFUSION THEN COMES THE COMPLETE TAKE OVER OF AMERICANS ASLEEP AT THE WHEEL OF A MONARCHIAL LEADERS FOR AMERICA HAS BEEN SOLD TO THE ENEMY/VALUES & ALL. THE FICO GAME IS A NOTHING. IT IS HOWEVER A TRACKING DEVICE USED THIS TIME TO SEPARATE A ONCE SOLIDARY NATION AFTER WW11.

[Brian]

I believe that the system we have for scoring credit is not perfect but it is a good system. For those of you who have allowed authorized users on your accounts, you can acoomplish the same thing by making them co-applicants on the account. Obviously if you trust someone enough as an authorized user than you should be able to trust them as a co-applicant. And actually as a co-applicant, it gives the person your trying to help more of an incentive to keep the account current because they are held liable for account balances whereas the authorized user is not.

[Lynn nelson]

This whole plot of FICO is designed to benefit FICO. The credit system was never designed with the consumer in mind.We all know who own the credit bureaus!! So of course they don't want consumers to improve their scores. These billionaires make billions of dollars on people with bad credit. So, once again I say, of course FICO wants it stopped!!

[ohgorsh]

The reason all three reporting agents have false information is to lower your three totals they take the second total to get a loan which by all means is just corruption at its finest
They are cracking down so anyone with a sub prime loan and is trying to finanace will unfortunely not be able to get a decent loan
So in 2008 a trillion dollars will be gone in homes but wall street lenders who the loans are sold too make good money
Just like they did to the farmers

[Irma Bernard]

Please let me know the
interest rate and any
specific terns.