| Improve Credit Score |
| By Credit Federal |
Published
08/1/2008
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Credit Report
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Easiest Way To Improve Credit Score Is To Ride Someone's Credit Card Account
Piggybacking; being an authorized user of someone else's credit card account, has long proven to be an easy way to improve credit scores. So easy; in fact, Fair Isaac Corp. had planned on taking measures to eliminate that tactic by developing new credit scoring methods. They have since; however, decided to allow piggybacking to continue.
So at least for the time-being, if you have a bad credit score, find a person with good credit, become an authorized user on his credit card account, and give your score a boost.
As mentioned earlier, Fair Isaac Corp.; which is the creator of the FICO credit score, had intended to end the practice this year due to abuses. But, during recent Congressional testimony, Fair Isaac acknowledged it had changed its mind.
"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 trade lines present on the credit report" in a revamped version of the credit score formula called FICO 08, Thomas J. Quinn, Fair Isaac's vice president of scoring solutions, said in prepared testimony. "Our scientists have devised a method to consider these trade lines while materially reducing the negative impact that could arise from piggybacking."
Private companies began to take advantage of the practice and would; for a fee, pair bad credit people with those that had good credit, thus adding bad credit people as authorized users on the accounts of those with good credit. The bad credit user never got to use the account or even see the credit card, he was simply listed as an authorized user for the purpose of boosting his credit score.
The private companies would share some of the fee they obtained from the bad credit person with the good credit partner. The more fees the bad credit customers paid, the more credit card accounts they would be added to, increasing the size of the credit score boost. It was these private companies that angered FICO and lenders, who deemed the credit boost strategy as fraudulent, since it artificially boosted credit scores and thus allowed people to get approved for loans they wouldn't otherwise be able to obtain... and may not be able to make good on by repaying. Lenders agreed that the practiced resulted in higher risk and made credit more expensive for all consumers.
"We worked very hard with the credit bureaus and lenders to find how important it was to how many people," Campbell says. Fair Isaac maintained discussions with lenders during the process. "Fortunately, we were able to come up with technology that makes it much harder to game the system." As for what that technology entails, Fair Isaac was unwilling to elaborate.
In the midst of its work on piggybacking, Fair Isaac paused the planned rollout of FICO 08. The company began discussions with the credit bureaus once it was confident that its technology made manipulation more difficult and that the company could filter any misrepresentation. The timing of FICO 08's release is unclear and will vary depending on the credit bureau, but should be soon, Campbell says. "As soon as we get everyone on the same page, we'll get that out."
Whenever FICO 08 debuts, the recently announced change has a clear objective: "Keep good users of authorized credit and make it much harder for bad guys to game the system," Campbell says.
Check your credit report to fix errors and to look for discrepancies. For example, do you know what "account closed at grantor's request" means? If you see "account closed at grantor's" request or "closed by grantor" on your credit report, it means your credit card issuer; for some reason, had your account closed. If this isn't true and you requested that your account be closed, you can dispute the credit report error. Include a copy of your credit card close request and certified mailing or return receipt.
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