Read Fair Isaac Corp's full testimony given to a Congressional subcommittee focused on credit education. This is the one they are desperately trying to hide…CONGRESSIONAL TESTIMONY
Denver, CO - 10/26/09 - Fair Isaac Corporation – the company who determines your credit score and sells it to banks – recently released a new credit scoring model called FICO® 08. Many American consumers are wondering how the changes will affect them, how soon those changes will take place, and how to raise their new credit scores. A Denver based credit advisory firm, BoostMyScore.NET, has been working diligently to answer the questions not being revealed by the score’s makers.
Firstly, while this new scoring model was released a few months ago, it won’t likely affect any of us for several years. It will take time for it to permeate the entire financial industry in America. Every bank, car dealership, credit card issuer, and mortgage company will be on the hook for a costly “upgrade”, should they choose to use FICO® 08. William Airy, Founder and CEO of BoostMyScore.NET, states, “Simply because Microsoft® just released Windows 7® doesn’t mean that everyone in America is going to buy and install it tomorrow morning.” Airy continues, “In fact, a large majority of banks and lending institutions are still using the FICO Classic® model, which is nearly a decade old.”
However, once FICO® 08 is in effect, credit score declines are predicted nationwide. While leniency will be practiced on small items, like a missed payment, most people will see a reduction in their score as a result of the tighter restrictions against those of us who owe too much money on our credit cards.
So, how do you boost your credit score now and in the future? The answer is simpler than you may think, and it is far easier than being a good credit steward and merely paying your bills on time. While that is certainly the best method to practice, it may not be enough for you to achieve the loan you need.
One of the original intentions behind the new credit score model was an attempt to eliminate an effective and legal credit score boosting strategy called “piggybacking”.
Piggybacking is when one person with good credit rents out an Authorized User spot on their credit card to another person for a small fee. Once the renter is added as an AU, the account history – payments, limit, and balance – for the cardholder’s account appears in the renter’s credit file within a few weeks, thereby immediately affecting the renter’s credit score.
Fair Isaac Corporation permanently approved the piggybacking benefit in the FICO 08 model in July 2008 during a Congressional Subcommittee summit on Credit Education. The confirmation of the piggybacking benefit followed legal concerns presented by BoostMyScore.NET to the Federal Reserve and the Federal Trade Commission earlier that year.
In the end, pay your bills on time, every time. And if you need a quick boost to your credit score, piggybacking looks like a good option.
Denver – October 21st, 2009 – In an apparent attempt to frighten the general public away from boosting their credit score through an effective method known as credit “piggybacking”, the Fair Isaac Corporation (commonly known as FICO®) has released confusing and conflicting information to the public over the last two years, to include announcements of a new version of the credit score model dubbed FICO® 08. The new version, initially set to be released back in September of 2007, experienced repeated delays due to inherent conflicts with the Equal Credit Opportunity Act, and was only recently released in August of 2009.
“To a degree, the scare tactics have worked,” says Bill Airy, Founder and CEO of BoostMyScore.NET, “as piggybacking firms around the country have fallen completely off the grid, apparently themselves believing the cryptic and misleading messages released by the credit scoring company.”
In response, the BoostMyScore.NET team has tested the new FICO® 08 model, and according to Airy’s research, “It appears the piggybacking method of boosting personal credit scores under the new FICO 08 model continues to help American Consumers to acquire higher credit limits and better loan terms.” Airy continues, “People are in need of funds to help them purchase homes, cars, and to start new businesses, as well as to keep the ones they are currently running open. Achieving affordable loans helps them to accomplish this, but unfortunately not everyone can fit into the “box” of credit score worthiness. That’s where we come in.”
Now that it is obvious that the FICO® 08 credit scoring model continues to benefit consumers utilizing the piggybacking method, those in need of a credit score boost are urged to contact BoostMyScore.NET. The company, who holds a perfect record with the Better Business Bureau®, specializes in legally adding positive credit history to consumers’ personal credit reports through the piggybacking method the company Founder discovered five years ago.
For more information, go to www.BoostMyScore.NET, or call 1-800-531-1472
Controversial technique lets one consumer boost another's credit score
By Jeremy M. Simon
Piggybacking lives. Consumers who have good credit will continue to be able to boost others' credit scores by adding them as authorized users on credit card accounts through a practice known as "piggybacking."
Fair Isaac Corp., creator of the well-known FICO credit score, had announced last year it would end the practice due to abuses, but during Congressional testimony Tuesday, acknowledged it had changed its mind. A company official broke the news during a House Financial Services Subcommittee on Oversight and Investigations hearing entitled "What Borrowers Need to Know about Credit Scoring Models and Credit Scores."
"After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user trade lines present on the credit report" in a revamped version of the credit score formula called FICO 08, Thomas J. Quinn, Fair Isaac's vice president of scoring solutions, said in prepared testimony. "Our scientists have devised a method to consider these trade lines while materially reducing the negative impact that could arise from piggybacking."
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Article written by Marshall Silver, Harvard Law Graduate, on the legal interpretation of the credit reporting, credit scoring, and credit boosting industries and how they affect Consumers in America.
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Denver, CO -- August 08, 2008 -- Adding people as authorized users on Platinum Tier Credit Card Accounts will forever continue to benefit FICO® scores.
Fair Isaac Corp., creator of the widely used FICO® score, announced last year it would end credit score piggybacking. However, during Congressional testimony in July 2008, Fair Isaac Corp. acknowledged that based on legal arguments made by the experts at BoostMyScore.NET, it had reversed this decision (see "Fair Isaac's Written Statement"). As discovered by BoostMyScore.NET in early 2008, it would have violated the Equal Credit Opportunity Act...
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As the credit score analysts at BoostMyScore.NET predicted, the entire FICO® 08 scoring changeover, which was supposed to extinguish authorized user benefits to the credit scoring system, "was simply a fear based propaganda scare tactic".
According to Bill Airy, President and Founder of BoostMyScore.NET, "this was nothing more than good old fashioned smoke and mirrors politics." The value of the FICO® scoring model was diminishing in the eyes of the banks and lending institutions because of the so called "Credit Piggybacking" strategy used by BoostMyScore.NET and others.
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Denver, CO -- February 8, 2009 -- Adding people as authorized users on Platinum Tier Credit Card Accounts will forever continue to benefit FICO® scores.
More than a year and a half after it was first announced, FICO® 08 -- an updated version of the FICO® credit score system –- is finally making its debut in ‘09.
Fair Isaac Corp., creator of the FICO credit score, announced the first usage of the controversial FICO 08 when TransUnion utilized the new credit scoring program on January 29th. Equifax is expected to adopt the new system later this year. Experian Group, Ltd. has yet to institute the new system and is not expected to do so anytime soon, pending an unsettled lawsuit with Fair Isaac.
Initially proposed in June 2007, the original intent of FICO 08 was to stop the use of credit piggybacking as a method of improving credit scores. Credit piggybacking is a legal method of improving a personal credit rating by adding an individual as an “authorized user” onto an account of a person who already has good credit. This quickly and dramatically raises the authorized user’s FICO credit score.
Fair Isaac took the position that the consideration of “authorized user” accounts in their scoring model was a loophole that needed to be closed.
A Failed Attempt
This matter gained notoriety in January of 2008 when Fair Isaac’s attempt to halt the practice of credit piggybacking was challenged as illegal by BoostMyScore.NET, a Denver, Colorado-based company.
BoostMyScore.NET, which utilizes credit piggybacking to improve clients’ FICO credit scores, was of the opinion that ignoring authorized user accounts in an individual’s credit report was illegal –- and Congress, the Attorney General, and the FTC agreed.
In July of 2008 Fair Isaac, following the counsel of the FTC, conceded before a Congressional subcommittee that BoostMyScore.NET was correct in its finding that it would be illegal to ignore authorized user credit histories in calculating FICO credit scores.
About Credit Piggybacking
“By using the practice of credit piggybacking, those who deserve a good FICO credit score end up with one,” explains Bill Airy, BoostMyScore.NET’s founder and President. “Sometimes it’s the only way to help people out of the Catch-22 that if they don’t have credit they can’t get credit.”
“The way we help consumers improve their FICO credit score is perfectly legal and completely legitimate under the current rules and regulations governing this industry.”
“We’re not getting good scores for deadbeats with bad credit,” Airy clarifies. “Credit piggybacking doesn’t change or erase a bad credit history or make a bad credit risk suddenly look good. It just helps those who need to establish credit and/or raise their credit score to qualify for a loan and optimal financing terms. It’s an important service for legitimate borrowers, especially as the credit markets continue to tighten.”
“We’re not gaming the system in any way,” Airy asserts. “Fair Isaac created the system and we just play by their rules. But oversights and failures in those rules frequently work against responsible, credit-worthy people. Credit piggybacking is the fastest way of correcting and counterbalancing the flaws in their own system.”
FICO 08
Airy’s July 2008 victory required Fair Isaac to significantly revise FICO 08, which accounts for the delay in its release. Fair Isaac Corp. says they have found ways to make it harder for authorized users to benefit from primary account holders’ good credit, but neither the public nor the credit industry is privy to how they will be doing that, or how it will play into their “super secret” FICO credit score formula. Industry insiders believe FICO 08 will limit the number of “authorized user” accounts benefiting a FICO credit score to five; and reduce the benefit of lines that exceed that number.
FICO 08 also includes provisions that will – among other things -- reduce the negative impact of collections under $100 on an individual’s FICO credit score and increase the negative impact of multiple late payments. How any one individual’s credit score will specifically change as result of FICO 08 remains to be seen.
Industry experts predict that it will take more than a year for the lending industry to fully adopt the revised credit scoring model and that it will be quite some time before consumers actually experience the effects of these changes.
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