Good news for authorized users! Fair Isaac Corporation, the creator of the widely used FICO scoring model, has announced that it would restore authorized user accounts in the calculation of the FICO credit score. Last year the company prohibited this practice also known as "piggybacking" due to a large number of abuses. Fortunately, after scientific researches Fair Isaac Corporation came up with a way that would keep authorized user accounts in the scoring formula while foiling attempts of credit repair firms to game the scoring system.

A year ago becoming an authorized user was an excellent way to raise a credit score for people with no or bad credit. Piggybacking was often used by parents to help their kids build their own credit, or for one spouse to fix the other's poor credit score.

According to the financial experts, if a person is added to a credit card account, it can lift his or her credit score by 30 to 45 points. With two credit card accounts, an authorized user can expect an increase of 60 to 90 points, while five credit card accounts can boost a score by 150 - 205 points.

However, this strategy doesn't work anymore. Fair Isaac Corporation has stopped considering the credit history of authorized users in its scoring formulas because there was too much fraud connected with this feature. For a fee, Internet-based credit repair firms added people with bad credit scores as authorized users on accounts of clients with good credit. The bad credit consumers never used the account or got a credit card - this strategy was aimed just to improve their FICO score.

The credit repair service cost bad credit consumers about $1,000. The more they paid, the more credit card accounts they would be added to, making their score increase faster. In turn, the primary account holder got a couple of hundred dollars for the troubles.

The financial abuses were a big concern to Fair Isaac Corporation. This practice outraged lenders, who regarded it as a fraud. It allowed people with bad FICO score to improve their credit without exercising any financial discipline and get loans they would not be able to get ordinarily.

After consulting with the Federal Reserve Board and the Federal Trade Commission, Fair Isaac has decided to restore authorized user accounts in the calculation of the credit score. It reminded that such consumers as college students on their parents' accounts and spouses with no credit history of their own could be hurt by the change. Fair Isaac estimated that there are up to 3 million authorized users who could have lost their scores.

However, the FICO score revision doesn't mean that the company decided to shut its eyes to people who buy their way out of bad credit. The company created technology that makes it harder to game the scoring system. How they did it is a secret.

People who are trying to buy themselves a better credit score will find that there is no quick way to improve a credit score. They need to do it the old-fashioned way. Thus the company reduces the negative impact that could arise from piggybacking.

Due to its work on the new technology, Fair Isaac postponed the planned launch of FICO 08. Adding the innovation to the scoring formula will probably take several weeks. That's why the timing of FICO 08's release is not clear, but it is expected to be out soon.