Consumer Car Buying Advice Blog

New credit report practices change the rules regarding authorized users on credit card accounts. Here at Auto Credit Express we want you to know about some of these changes.

What is an authorized user?

An authorized user is someone assigned to a credit card account that is not the account holder. In the past, being assigned as a user to a credit card account when the account holder has a high FICO score also raised the FICO score of the authorized user.

In many cases, companies that specialized in credit rebuilding would solicit credit card account holders that had high credit scores, offering to pay the account holders for the use of their accounts for this purpose. The company would then assign their clients to these accounts to raise their credit scores.

The results of this practice

As a result, clients with poor credit would see their credit scores increase without having to repay any of their debts (although this was also part of the program). This practice artificially raised the credit scores of hundreds (perhaps thousands) of consumers.

The response of the credit bureaus

As this practice became more prevalent, it began to attract the notice of Experian, TransUnion and Equifax – the three major credit bureaus. Their response was to begin eliminating the effect that an authorized user account would have on an individual credit score. That process is not complete, so that anyone who is an authorized user will not change their credit score based on someone else’s charge card history.

The Bottom Line

When there’s a loophole, whether it’s regarding the law or something else such as credit practices, there will always be people that will take advantage of it. In the case of authorized users, it became evident that this practice was affecting the credit scores of a large group of consumers. Here at Auto Credit Express, we’re aware of how difficult it can be to rebuild your credit. We’ve been in the subprime car business for over 16 years and have helped thousands of customers reestablish their credit by helping them purchase new as well as reliable low-mileage used cars. For more information, visit our web site at www.autocreditexpress.com.

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