Authorized User and Co-Signing

[moorecredit]

So, credit history accounts for 15% of your credit score. Definitely worth taking a look at.

One popular method to increase the length of your credit history is to piggyback off someone's older account. The credit bureaus have said they don't count co-signing on someone else' account as a way to get credit history, but people say it still works. Personally I've never tried it because I've never had to. Has anyone seen this work?

Also, another method I'm hearing about is to become an authorized user (or signer) on an account. Apparently this too will show this account on your credit (along with it's start date). Again, has anyone ever tried this?

Honestly, my experience with credit repair and credit bureaus would lead me to believe that they it's certainly worth a try because it appears the credit bureaus are so disorganized.

[archer]

The bureaus tried to get rid of piggybacking with the FICO 08 model, but thankfully it didn't catch on. For whatever it's worth, the old model is here to stay.

And here's another way to look at it: Piggybacking may seem like "cheating" to some people, but how do you get around it? If someone adds an additional person onto their account, the account's age doesn't change. The only thing the bureaus could do is add an additional parameter that measures how long the separate parties were on the account. That's probably what they attempted to do with FICO 08. But for now, the only parameter measured is the age of the account, and if you're on it.

Having never done this myself, I too would like to know if someone has been successful doing it, and if the impact on their score was significant enough to merit a recommendation.

AC

[moorecredit]

yah, a long time ago, My girlfriend and I decided to start sharing our money so I put my money in her account and CLOSED my account. I can't believe I did that. We still have the joint account but I had had that account since I was a little kid. I'm sure it was older than hers. Oh well, I didn't know any better then.

Robert

[Jacobjohns]

Authorized user method does not have the same effect on your credit as it used to BUT Co-signing does. The reason for that is simple in my opinion. EVERYONE started the authorized user method and build ridiculous credit history . I remember seeing a person with like 6 month old credit become an authorized user and suddenly have a credit history of like 5 years, that was of course back a couple of years.

Co-signing is more like another SS# guaranteeing the credit. So if I have bad credit and my friend has great credit , I can apply for credit and get my friend to co-sign (take joint responsibility) for it. So that method can not really go away since it is more like "hey both of you are responsible and the history will start from when the loan is approved". As opposed to an authorized user were by I can get on a card that is five years old and COMPLETELY ASSUME THE PAST HISTORY of that credit.

There is another way actually. It is using UCC filings. They are a form of public filings. Ever wonder how car sales people get things on your credit report. Same with some property managers. These forms of filings are not that common on personal credit (they are mostly used for business) but they work just as well.

[archer]

Nice point. I see it like this:

Authorized user doesn't get the same "benefits" as a cosigner, because they don't take on the same risk. An "authorized user" isn't responsible for debt like the owner of the account. Should it go into default, only the owner is responsible. Until the AU takes full responsibility for the debt, then they shouldn't get the full benefits of the credit history.

AC

[archer]

A little research on UCC Filings:

UCC Filings are normally used with business credit reports, and act as a "financing statement, filed to perfect a security interest in named collateral and establishes priority in case of debtor default or bankruptcy." More, in-depth explanation of UCC-1 filings here: http://tinyurl.com/m53xqp

Essentially, when someone wants to take out a loan against some collateral (e.g. - a business needs money, and has assets it can use as collateral for the loan) the UCC-1 filing assures that the collateral doesn't have any other loans held against it (lien search).

The way people use this for "credit repair" is by using it to help build their credit when the borrower "personally" guarantees the loan by using their SS# and their FEIN. It shows up as a creditor line item, but under "public records" on their personal credit report like a judgment or lien would, but because it states UCC and other supporting information, it's not usually confused with a negative listing. The executing party shows up as the creditor. It shows up as a business account, with all the pros/cons that come with that (length of history and/or late payments).

It's a clever-ish way of getting more credit history on your credit report, but seems like a lot of work, and only certain people in certain circumstances can do it.

AC