If you would like to give your credit repair effort a quick boost just ask a willing relative, like mom or dad, to add you to one of their excellent credit cards as an authorized user. When the creditor reports to the credit bureaus your score will take off. Pure credit repair magic. Or is it? This somewhat controversial credit repair technique really does work, but there are caveats.
The controversy around authorized user accounts arose initially in 2004 when word got out on the Internet that it was possible to manipulate your credit score by being added to a third party’s credit card. Once the creditor reports to the credit bureaus the score benefit of the donor’s card is inherited by the recipient. It is a pretty neat credit repair trick. And it was spotted and capitalized on by a few enterprising souls who were soon brokering these accounts online for big money. And what had been a nice way for one family member to help another became a big dirty business designed to manipulate credit scores.
The End of Brokered Accounts
The days of brokered authorized user accounts have ended with the implementation of the FICO ’08 credit scoring software update. This new release of the FICO model effectively blocks brokered accounts, while simultaneously protecting legitimate family member accounts.
The Credit Repair Benefit
Our position on authorized user accounts is that they can provide a perfect little credit repair boost to get you back on your feet. So, if you have a relative that is eager to offer a helping hand just have them call their credit card issuer and ask them to add you as an authorized user. It is important that the donor’s account be at least three years old with a perfect pay history. It is also important that the balance be reasonably low relative to the limit. The card can be sent directly to them, you do not ever need to use the card, and the donor can remove you anytime they wish.
As nice as the helping-hand of an authorized user account may be, it is not the perfect long term solution. If you are going to utilize this handy credit repair tool we highly recommend that you start the process of building your own good credit simultaneously. Although authorized user accounts may boost your score there are many lenders that require that you have a minimum number of accounts in your own name to qualify, regardless of your score. If you are in our credit repair program we will provide all of the guidance you need to optimize your scores and rebuild your credit for genuine long-term success.