Authorized User Me

You posted in June of 2007, that Fico will no longer count authorized user.  I am now being told that this never went into effect.  Your article also mentioned that it would go into effect in Sept. of 2007 for most lenders. 

I truly believe in the information on this blog and would like to know if this other person knows what they are talking about.  Please respond

J.A.

———————-

Hello J.A.,

The June 5, 2007 article was a copy of a press release from Fair Isaac:

The adjustment removes authorized user accounts from consideration by the scoring model in FICO 08, the newest version of the Classic FICO credit score which Fair Isaac expects to become available to lenders starting in September.

That never happened.  The FICO 08 model hasn’t been released yet.  The WSJ brings us the latest news from December 18, 2007 regarding the release of the FICO 08 model:

Consumers could start seeing the new FICO scores by the spring, though some lenders may take additional time to test the system to see how it works with their business and loan portfolios. Fair Isaac, which last revamped its scoring model earlier this decade, says it is accelerating its FICO 08 rollout, partly in response to lenders’ demand for better risk-management tools.

Here’s an interesting footnote to all of this.  Most mortgage automated underwriting systems use the Classic version of FICO.  Fair Isaac developed an arguably superior model several years ago called NextGen and despite Fair Isaac’s attempts to market NextGen, FNMA and FHLMC still stick with Classic to this day.  And, to my knowledge, VantageScore isn’t utilized by many (read: any) mortgage lenders.  So, now we hear that there is a new FICO 08 version slated for Spring 2008.  OK, that’s nice, BUT…

When will Fannie Mae and Freddie Mac adopt the FICO 08 model? 

My guess is not immediately.

You will notice that there is a footnote at the bottom of the Broken Credit Blog’s older Authorized User articles that reference that June 5, 2007 FICO press release.  I want to thank you J.A. for your question.  I’m going to add a footnote to that June 5, 2007 article referencing this article.  The Authorized User strategy continues for the time being.

Thanks for the questions and hope this helps.

Paul