This came from a manager that is over MYFICO and has worked for Fair Isaac for over 22 years. The authorized user accounts have been abused. It’s not fair to someone that actually owns their own account or has been cosigned for. They have demonstrated financially responsibility, through their actions, by making payments on time. The AU is just piggybacking the information off of another individual’s credit report. The lenders and FICO score have no way of measuring what level of credit risk that the person is. And the FICO score has to be earned. It can not just be handed out. This will NO LONGER be calcualted into the algorithm.
There is too other parts to this topic. Personally, I just had to start over because my scores are very low due to a chapter 13 bankruptcy filing. I knew what the consequences are, including that it would devastate my score. And the only way to improve it is to start out with a secured visa credit card, to which I did. As soon as this is discharged then I will go seeking a secured personal loan. And I know that it will take time and not happen overnight. My credit union is aware of what I am doing & will help me out. In the managers words I am demonstrating through my own actions of personally making payments that I am entitled to the score as it goes up.
The other part of this issue is the creditors to which I have talked to some of them. So this is where they stand. Anyone that has authorized user accounts on their credit report has not demonstrated that they can make payments on the account regularly each month. We have no way to measure their level of credit risk. As long as the account responsibility belongs to them then we can get an accurate credit profile. Other than that we will start them at a higher interest rate until they can personally prove themselves. And the score is useless unless they are responsible for the account or have been cosigned for. In other words they will be treated as new credit. And if they have both authorized user accounts and their own trade lines then we will use only what they actually own & are responsible for.