Well some good news in the financial sector; Fair Isaac Corporation, best known to most of us as the source of FICO credit scores, Tuesday announced it will be adjusting it’s credit scoring standards to take into account the common practice of credit ‘boosting‘. It will no longer take into account an authorized user status when determining your credit score.
A brief excerpt from a quality blog I frequent:

An authorized user is a person permitted by a credit account holder to use an account, typically a family member who is managing credit for the first time. Used legitimately, authorized user account information has helped both lenders and consumers by enabling lenders to use FICO scores when making credit decisions for consumers who are starting to establish a credit history. Fair Isaac’s research indicates that the next version of its FICO scoring formula will deliver increased predictive power without considering authorized user accounts.

I am very pleased an industry heavyweight has hopped on board with the effort to curb some of the issues that are finally coming to light in the housing market. The bottom line of this credit boosting change (named “FICO 08″, available this September) is that it will prevent people from qualifying for loans who never should have qualified for them in the first place! There is no doubt this change comes a little late, but is that really a surprise?

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