There are plenty of valid ways to improve your credit score. But one way to improve the FICO score used to determine whether or not you will get a loan, and what sort of interest rate you will get, is actually considered fraudulently manipulative. Here’s how it works:

You check your credit report and realize that the score just isn’t what you would like it to be. You contact a company that promises to “instantly” boost your score. That company adds you as an “authorized user” on a credit card held by someone with good credit. Now you are attached to a good credit history, and your score goes up.

The credit card owners are paid to allow their cards to be used in this manner. Some people even make a living by having their cards for these services. The “authorized user” doesn’t ever get a credit card, and never even receives a card number or statement, so the card owner remains protected. Fair Isaac, the company that creates the credit score rating, considers this manipulative, since people with fair, or even poor, credit are paying to receive a number that does not accurately reflect creditworthiness.

Now, however, Fair Isaac is fighting back. In a press release, the company points out that it is going to adjust its FICO score formula so that “authorized user” accounts are no longer consider in its calculation:

“We will do whatever it takes to protect the reliability and accuracy of FICO credit scores for lenders, and to ensure lenders can continue to use FICO scores with confidence when making their most important customer decisions,” said Dr. Mark Greene, CEO of Fair Isaac. “We will continue working with lenders, regulators and others in the credit reporting industry to end deceptive practices that fraudulently misrepresent consumer credit histories for profit.”

Tags: FICO score, personal finance, financial planning, finances,
financial goals, check credit report , improve credit score, Fair Isaac