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 On July 31, Fair Isaac announced that its newest credit-scoring model, named "FICO 08," will include authorized user accounts when calculating someone's FICO credit score. So if you co-sign for your daughter's loan for a trip to Europe, well, make sure she isn’t going to bring down your credit score too. The company estimates that 50 million consumers are "legitimate" authorized users on someone else's credit card. Legitimate authorized users, such as spouses, parents and children, have relationships with the primary accountholders and reasons to share access to the accounts. If they have bad credit, it may be affecting your credit score. FICO 08 was originally designed to ignore authorized user accounts, in an effort to stem illegally using a stranger's credit as an authorized user and artificially inflating one's score. Why the drastic change? Fair Isaac said lenders complained that using FICO 08 would hinder compliance with the act Federal Reserve Regulation B, which requires lenders assessing a married person's credit risk to consider the credit history of accounts shared by the spouses. "The FICO 08 scores of legitimate authorized users will now reflect the information on their credit reports about the account(s) on which they are authorized users," says Tom Quinn, vice president of global scoring solutions for Fair Isaac. How the change directly impacts you Fair Isaac's announcement should please consumers whose credit histories largely consist of authorized-user accounts or who have spouses with excellent credit when theirs is weary. "The millions and millions of consumers who would've seen their scores go down are not going to see that happen," says John Ulzheimer, president of Credit.com educational services. Some people only have authorized user accounts, so without this new change they would have no credit score at all. Published: Saturday 23rd of August 2008 05:52:15 PM For more information on credit cards and related topics, please see our library of articles. 
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