More News About the FICO Credit Score ChangeUpdate: In July 2008, FICO announced that they reversed their decision and would continue to count authorized user accounts from their new FICO 08 scoring formula. Authorized user accounts are counted in current FICO credit scores, although the company has added additional features to block the impact of piggybacking services. Read more about how to establish healthy credit for the first time or rebuild after credit damage. In June 2007, we alerted you about an upcoming change to the FICO® credit scoring system. The modification, which is the most significant update to their scoring models in 10 years, will begin to roll out in September 2007. The newer FICO scores will ignore all authorized user tradelines on your credit files. As such, your scores will no longer benefit from any authorized user accounts. You can review our original alert about this FICO Score change. Since June, we have received information regarding the change to the FICO scoring system. Credit.com has learned that Experian will be the first of the three national credit reporting agencies to install the new FICO score that excludes authorized user accounts. This installation will take place during September. The new version of the FICO scoring model will be available to lenders soon thereafter. What does this mean for you?First off, you shouldn’t panic. If you have an account where you’re listed as an authorized user, it’s very likely that you’ll still get the benefit of that account in your Experian FICO score for some time. Note: Experian’s FICO score is called The Experian/Fair Isaac Risk Model. Normally, when one of the credit bureaus introduces a newer version of the FICO scoring software, it takes lenders many months, if not years, to make the switch. Adopting a new scoring model can be very time consuming and very expensive and most lenders will take at least 12-24 months to make the conversion. This is good news for consumers who might be depending on authorized user accounts. But, remember that September 2007 signals the beginning of the end. Experian installing the newer FICO version officially begins the process. This means that eventually your Experian FICO score could go down because of nothing more than this change to the credit scoring system. The other two credit reporting agencies, Equifax and TransUnion, will be installing their newer version of the FICO score sometime in early 2008. Credit.com will alert you as soon as we find out more specific dates. If you’re unsure if you’re listed as an authorized user on someone else’s credit card account, you can verify it by checking all three credit reports online. Look at the credit card accounts listed on your credit reports. You will easily be able to identify whether or not you are an authorized user, a joint card holder or the primary holder of the account. Any account that’s listed as “authorized user” will eventually stop being counted in your credit score. Our research has concluded that a disproportionate number of women will be affected by these changes. Credit.com’s surveys have concluded that 61% of the people who identified themselves as having an authorized user account were women versus 39% being men. This verifies what we have already known for many years, which is that when two people get married, most of the time it’s the woman who changes how she uses credit and becomes an authorized user on her husband’s credit accounts. Younger credit users are also at risk. Authorized user accounts have traditionally been used by parents to help their kids quickly establish a credit history. College students and recent graduates should be aware that these authorized accounts (usually the oldest on their credit reports) are going to be ignored by credit scores shortly. You can avoid problems related to this FICO score change by becoming a joint cardholder on any account where you are currently listed as the authorized user. This means that you will have equal liability for the payments and for the debt. You could also open a new account, such as a credit card, in your name before your score drops. This will cause new credit inquiries to appear on your credit files and eventually a new account will appear as well. The inquiries could lower your credit scores, albeit a lesser impact and for a shorter amount of time. 
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