Recently FICO credit score boosting schemes using authorized credit card user information have been prevalent among credit repair companies. Those schemes have caught lenders’ attention and finally resulted in Fair, Issac’s decision to change its credit scoring formula in the coming months.
In the wake of these concerns, Equifax Inc. emphasized in a prepared statement that VantageScore(sm) and the Equifax Risk Score 3.0 are not - and never have been - impacted by the authorized user manipulation. Authorized user information is excluded in calculating both VantageScore and the Equifax Risk Score 3.0.
"Being an authorized user on someone else's account does not demonstrate an individual's ability to pay their credit obligations. For this reason, it does not make sense to include authorized users in the calculation of a credit score," said Lisa Zarikian of Equifax Predictive Sciences.
Individuals have been paying to become authorized users on credit card accounts of people who have excellent credit. These people use their purchased "authorized user" status to artificially boost FICO credit scores to gain access to a loan or loan terms they otherwise would not qualify for. "Piggybacking" on someone else's credit is a major concern to lenders, especially within the mortgage community, who are trying to protect their businesses from loan delinquencies and foreclosures.
VantageScore, a credit score jointly developed by Equifax, Experian and TransUnion, is a was introduced to the market in March 2006 as an alternative to FICO score. VantageScore is being independently marketed and sold separately through each of the three national credit reporting companies via licensing agreements with VantageScore Solutions, LLC.
