Your Credit Score: FICO Plans to Eliminate Authorized Credit Card User Accounts - Part 3
- Date: 2007-07-27 - Word Count: 438
Share This!
Copyright © 2007 Ed Bagley
Do you realize that in our country you are penalized for practicing good money management habits? Think about it.
If you paid for your own college education and refused to fall into the credit card trap that uses lenders to purposely suck the financial life out of naïve students, you might graduate debt free and have no credit history.
When you want to buy a vehicle on credit or a home with a mortgage, you could not get a loan without a credit repayment history and a decent FICO credit score.
For years young adults with no credit history, limited credit history or blemished credit history have worked around the problem by having someone with good credit-usually a parent, spouse or good friend-added as an authorized user to their credit card.
Once the authorized user is added, his or her credit card payment history is added to the account, giving the original card holder a higher credit score and access to loans and better loan terms.
All of this is about to end as Fair Isaac (the developer of the FICO credit score) will create a new scoring formula to eliminate the authorized user tactic. Learn what you can do to protect yourself.
Fair Isaac is taking the action because it estimates that 30% of the 165 million consumers with credit cards have authorized users on their accounts.
Once the new system is implemented in mid-2008, millions of authorized users will see their credit scores decline or go into free fall. Authorized users with no credit history of their own will see their credit scores disappear. Those hurt the most may be young adults and married women.
Here are some tactics these two population groups can use to fight back:
1) If married and listed on your spouse's account apply for a credit card in your own name.
2) Apply for a revolving credit card from a department store or other retailer as they are easier to get because they generally have lower credit limits and higher interest rates.
3) Apply for a secured credit card because you put money into an account in advance to cover your card transactions. If you default on your payment, the lender debits your account to cover the payment.
Sometimes secured credit cards become unsecured credit cards when you pay timely over a period of time. In some cases, you may even get back the initial deposit in the secured account plus interest.
4) Try to keep your balance below 30% of your available credit as this credit utilization will improve your credit score.
You can research fees and other features of credit cards at
http://www.bankrate.com
(Note: This is the last of a 3-Part Series.)
Do you realize that in our country you are penalized for practicing good money management habits? Think about it.
If you paid for your own college education and refused to fall into the credit card trap that uses lenders to purposely suck the financial life out of naïve students, you might graduate debt free and have no credit history.
When you want to buy a vehicle on credit or a home with a mortgage, you could not get a loan without a credit repayment history and a decent FICO credit score.
For years young adults with no credit history, limited credit history or blemished credit history have worked around the problem by having someone with good credit-usually a parent, spouse or good friend-added as an authorized user to their credit card.
Once the authorized user is added, his or her credit card payment history is added to the account, giving the original card holder a higher credit score and access to loans and better loan terms.
All of this is about to end as Fair Isaac (the developer of the FICO credit score) will create a new scoring formula to eliminate the authorized user tactic. Learn what you can do to protect yourself.
Fair Isaac is taking the action because it estimates that 30% of the 165 million consumers with credit cards have authorized users on their accounts.
Once the new system is implemented in mid-2008, millions of authorized users will see their credit scores decline or go into free fall. Authorized users with no credit history of their own will see their credit scores disappear. Those hurt the most may be young adults and married women.
Here are some tactics these two population groups can use to fight back:
1) If married and listed on your spouse's account apply for a credit card in your own name.
2) Apply for a revolving credit card from a department store or other retailer as they are easier to get because they generally have lower credit limits and higher interest rates.
3) Apply for a secured credit card because you put money into an account in advance to cover your card transactions. If you default on your payment, the lender debits your account to cover the payment.
Sometimes secured credit cards become unsecured credit cards when you pay timely over a period of time. In some cases, you may even get back the initial deposit in the secured account plus interest.
4) Try to keep your balance below 30% of your available credit as this credit utilization will improve your credit score.
You can research fees and other features of credit cards at
http://www.bankrate.com
(Note: This is the last of a 3-Part Series.)
Related Tags: finance, credit score, fico, loan approval, free credit report, monthly payments, mortgage payments
Ed Bagley's Blog Publishes Original Articles on Current and Past Events with Analysis and Commentary on Movie Reviews, Sports, Lessons in Life, News and Comment, Jobs and Careers and Internet Marketing intended to Delight, Inform, Educate and Motivate You the Reader. Find Ed's Blog at:http://www.edbagleyblog.comhttp://www.edbagleyblog.com/MovieReviewArticles.htmlhttp://www.edbagleyblog.com/LessonsinLifeArticles.html Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are