How do authorized user accounts work, and can they be a real benefit to my credit repair process?
Authorized user accounts are a potentially valuable credit repair tool for the reason that they have the unique ability to transfer their entire credit score value from one person to another.
The FICO scoring model evaluates the entire content of your credit file. Each account contributes to your final credit score based on its characteristics, including account type, age, payment history, number and type of derogatory events associated with the account, as well as the balance relative to the account limit. All of the scoring criteria are combined to produce your final credit score.
Shaping Your Credit
Most people starting credit report repair programs have a significant preponderance of negative accounts on their credit report. In many cases they have no positive accounts present at all. In these cases, assuming our credit repair client is not able to obtain traditional unsecured credit cards, we will inevitably ask them to open new secured credit cards in order to start building positive accounts to provide some lift to their scores. In the long term building one’s own credit is essential and indispensible. But in the short term there is a downside.
The Timing Issue
As valuable as these new credit cards are to the credit repair process, there will be a short-term price to pay. For the first three or four months ones credit scores will actually fall. The reason for this is that the FICO scoring formula is designed to identify new accounts as untested and potential risky. After a few months of timely payments and proper balance management the credit scores will begin to reflect a strong positive influence.
Quick Score Results
Authorized user cards have no such probationary period. In other words, the full credit repair benefit will accrue at the very moment that the authorized user account appears on your credit report. In addition, the potential contribution of one of these cards is enormous as it can carry over a long and perfect payment history of a solid donor. Every credit repair case is different; your timing requirements may dictate one approach while others may have other needs. We suggest consulting us before deciding on a credit repair course of action.