Credit score formula changes again
Posted on July 31st, 2008 – 4:35 PMBy Kara McGuire
Like software, credit score technology changes from time to time and a new version is released. Fair Isaac launched FICO 08 recently and the formula included a change that had some users up in arms. In the earlier versions, authorized users such as teenage kids or spouses with no credit history could build a record of responsible credit use by becoming an authorized user on a parent or partner’s card.
FICO did away with allowing authorized user credit accounts to count towards the calculation in the 08 version, citing the emergence of so-called credit score repair companies that claimed to boost a person’s score by unknowingly “piggybacking” on someone else’s good credit.
Well, today Fair Isaac announced that it figured out a way to include authorized users in the credit score calculation “while materially reducing any potential impact to the score from tampering,” according to the press release.
Who will care about this? The estimated 50 million U.S. consumers who are legitimate authorized users on a person’s credit card.
Fair Isaac didn’t provide details about how this new technology will thwart credit doctors while helping Junior develop a credit footprint.
4 Responses to "Credit score formula changes again"
that’s great that they are changing their formula because I get so annoyed to find out that other people have better credit scores than me and get better rates than me all because their name was under their parent’s credit cards, that is so unfair!!!!
We bought a new car last week and financed part of it and I asked what our credit scores were. My husbands was just under 800 and mine was 828. We were each about 30 points lower last year when we applied for the mortgage on our new home. I’m guessing the increase had something to do with this change, I know I was quite surprised at how much they had gone up.
Turns out that FICO 08 was tabled while this hitch was being worked out. No word yet on when the credit bureaus will get the go-ahead to use it again. Jeremy , a staff writer at the website creditcards.com, tipped me off to this. Here’s
his story.
I recently got my score by checking out one of the websites that you had recomended but I’m having a hard time gauging what it means in terms of the FICO… the score was 901 on the TransUnion scale… says 84th percentile but not sure how that translates into the FICO. Any idea on how I could find that scale/estimate?
