The days may be numbered for dozens of Internet-based companies that promise to quickly boost FICO credit scores by 200 to 300 points.
What is credit piggybacking???
Using a FICO-boost service, a mortgage applicant with a history of late and missed payments and a low FICO score in the 500s, for example, could puff up his or her score well above 700 and be eligible for the best interest rates and fees.
Though the add-on users receive no actual access to the credit card and cannot rack up charges, Fair Isaac's current FICO model allows the cardholders' excellent payment histories to flow directly into the credit files of all authorized users on the card. The addition of the high-quality credit quickly raises the scores of any authorized users - even though the add-on user may still be a poor credit risk and is highly likely to default.
Illegal? No
unethical? Possibly
Fair Isaac Corp., developer of the widely used FICO score, soon plans to introduce key changes designed to derail schemes that transplant high-quality credit-card histories into the files of people with low FICO scores. Fair Isaac, worried that its credit-scoring system is being gamed to facilitate fraud, is preparing a crackdown. Starting this September, the updated version of the FICO software available to lenders - the "FICO '08" model - will no longer consider authorized-user accounts in computing credit scores.
However, some credit experts say there could be a downside: Children and other legitimate authorized users no longer will get the benefits of their sharing of their parents' or grandparents' high-quality credit DNA. Their FICO scores will be depressed or might even disappear in some cases.
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Yes, FICO 08, will do what you say. However, most lenders are SLLOOOOWWW to change their software. I'm still seeing reports with FICO 05. I'm not too worried, furthermore, you can still add them as Co-borrowers, though it maybe more difficult to qualify these people, someone with a strong history with that card can get exceptions with their card company.
Finally, their are now more aggressive attorney's looking to sue the credit bureau's, and their winning often. There is still going to be plenty of business available for solid credit repair companies, especially ones who "Sue" the bureau's regularly.