Building credit score from scratch

[vsjhoc]

I'm almost positive they have changed the system so that this no longer works. Many parents were doing this to get their kids better credit scores but you can't anymore. I'll see if I can find a link one way or the other.

The FICO score has not yet been changed in this respect. Authorized users still receive the benefit/burden of the primary cardholder's credit history.

[disneysteve]

The FICO score has not yet been changed in this respect. Authorized users still receive the benefit/burden of the primary cardholder's credit history.

Okay. I did some searching and found what I was talking about.

They no longer allow "piggybacking" where a parent, for example, adds a child as an authorized user on the account so that the child gets the credit score benefit from the parent's good behavior.

Now, the parent has to open a joint account with the child. But that is not without potential problems. "The worst thing would probably be adding your kid as a joint user without thinking through what that really means," says Liz Pulliam Weston, a syndicated financial columnist and author of "Your Credit Score: How to Fix, Protect and Improve the 3-Digit Number that Shapes Your Financial Future." "The kid now has equal access to your account and equal responsibility for paying the bill." While that might be fine for some families, it could turn out to be a disaster for those who are financially insecure. Just as children's credit scores benefit from parents' on-time payments, all would be penalized for late payments or defaults.

[Seeker]

Okay. I did some searching and found what I was talking about.

They no longer allow "piggybacking" where a parent, for example, adds a child as an authorized user on the account so that the child gets the credit score benefit from the parent's good behavior.

Now, the parent has to open a joint account with the child. But that is not without potential problems. "The worst thing would probably be adding your kid as a joint user without thinking through what that really means," says Liz Pulliam Weston, a syndicated financial columnist and author of "Your Credit Score: How to Fix, Protect and Improve the 3-Digit Number that Shapes Your Financial Future." "The kid now has equal access to your account and equal responsibility for paying the bill." While that might be fine for some families, it could turn out to be a disaster for those who are financially insecure. Just as children's credit scores benefit from parents' on-time payments, all would be penalized for late payments or defaults.

Yes, this is correct.

Adding someone to your account does not give the added person any credit benefit. The CC company does not ask for a SSN, they just add another name.

Converting your account to a "joint" account (which means that their SSN is on the account as well), means that the account is "shared" -- and any of the two may be pursued if the debt goes into default.

People credit ratings will change often.... because this is a calculation based on many variables (each company does it differently), and one of those variables is "the passage of time."

It may seem that a partner's rating went up because of adding her to an already established account, but if the original account holder did not give them another SSN or the account was not made into a "joint" account, then her rating probably went up for different reasons.

[yellow heel]

Ok. Here is an update.

I just called up citicard and added my wife's name/ssn to my account. I hope this will do the trick. They said it will here in a week or so.

I will do a credit check on her and i guess we'll find out. Any idea how long it will take to show up on the credit check?

[Seeker]

Ok. Here is an update.

I just called up citicard and added my wife's name/ssn to my account. I hope this will do the trick. They said it will here in a week or so.

I will do a credit check on her and i guess we'll find out. Any idea how long it will take to show up on the credit check?

Well, you could have asked Citicard how regularly they report to Credit Reporting Agencies.... each CC company may have different reporting policies.

If you made your account a joint account and provided both the name and SSN of your wife, then I would suspect that in three months (assuming quarterly reporting) of payments you should see some gain on her score.

[gekkoplus]

Related query-

How can a person build credit history/score without a SSN? My wife can not have a SSN because of nature of her visa. But she has a tax identification number which we usually use anywhere she needs to provide a SSN.

Recently she was approved an Amex credit card just based on her tax identification number. I was wondering if that will help her to build some credit history in the future.

[vsjhoc]

Okay. I did some searching and found what I was talking about.

They no longer allow "piggybacking" where a parent, for example, adds a child as an authorized user on the account so that the child gets the credit score benefit from the parent's good behavior.

Who is "they"?

Perhaps some individual card issuers no longer allow authorized users to be added. I don't know of any; if fact, AmEx recently invited and encouraged me to add authorized users to my account.

But the FICO scoring formula has not been changed yet. Authorized users still inherit the history (be it good or bad) of the primary cardholder.

[disneysteve]

Who is "they"?

Perhaps some individual card issuers no longer allow authorized users to be added. I don't know of any; if fact, AmEx recently invited and encouraged me to add authorized users to my account.

But the FICO scoring formula has not been changed yet. Authorized users still inherit the history (be it good or bad) of the primary cardholder.

I'm sorry. "They" is the 3 major credit reporting bureaus - TransUnion, Experian and Equifax. Yes, you can still add authorized users to your account, but those people will no longer inherit the credit history of the primary user. In order to do that now, the account needs to be a joint account so that both people have equal responsibility on the account.

So, for example, if I add my daughter as an authorized user on my credit card, it won't do anything to help her credit score. If I open a joint card with her, that will help her score.

[disneysteve]

Fair Isaac Moves to Protect Lenders from Fraudulent Manipulation of Authorized User Credit Card Accounts

Here is an article about this direct from Fair Isaac, the ones who generate the FICO score.

The adjustment removes authorized user accounts from consideration by the scoring model in FICO 08, the newest version of the Classic FICO credit score which Fair Isaac expects to become available to lenders starting in September.

[vsjhoc]

Fair Isaac Moves to Protect Lenders from Fraudulent Manipulation of Authorized User Credit Card Accounts

Here is an article about this direct from Fair Isaac, the ones who generate the FICO score.

The adjustment removes authorized user accounts from consideration by the scoring model in FICO 08, the newest version of the Classic FICO credit score which Fair Isaac expects to become available to lenders starting in September.

The new version has been delayed and has not been made available to lenders yet.

[disneysteve]

The new version has been delayed and has not been made available to lenders yet.

I hadn't heard that (obviously). Where did you hear that it got delayed? Any links? I'd like to read about what they plan to do or when they plan to implement it. I know I've read about it in MONEY and Kiplinger's also but heard nothing about it not going into effect.

[vsjhoc]

I hadn't heard that (obviously). Where did you hear that it got delayed? Any links? I'd like to read about what they plan to do or when they plan to implement it. I know I've read about it in MONEY and Kiplinger's also but heard nothing about it not going into effect.

See this CNN/Money.com article dated 2/8/2008. Dr. Mark Greene, the CEO of Fair Isaac, is quoted as saying:

"Fair Isaac is in the process of rolling out a new credit score product, FICO 08, in May."

Sorry, I just lost the link, but on Fair Isaac's FICO discussion forums there is very recent anecdotal evidence from authorized users who track their scores regularly that there has been no change.

[disneysteve]

See this CNN/Money.com article dated 2/8/2008. Dr. Mark Greene, the CEO of Fair Isaac, is quoted as saying:

"Fair Isaac is in the process of rolling out a new credit score product, FICO 08, in May."

Sorry, I just lost the link, but on Fair Isaac's FICO discussion forums there is very recent anecdotal evidence from authorized users who track their scores regularly that there has been no change.

Thanks.

Sorry for the misinformation everyone.

[vsjhoc]

Thanks.

Sorry for the misinformation everyone.

Don't sweat it. I have seen a lot of personal finance "experts" saying that the change to the scoring system has already gone into effect.

[disneysteve]

Don't sweat it. I have seen a lot of personal finance "experts" saying that the change to the scoring system has already gone into effect.

I can understand that. I've read about the new system multiple places but haven't read a single thing about it not actually happening.