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Change In Credit Scoring Rules

Late in January of 2009, the Fair Isaacs Company, from which is derived the FICO Score will be changing its scoring rules to help improve consumers credit scores. So, exactly how will these changes help? Consumers with late payments on debts of less than 100 dollars will be ignored. Also, less negative weight will be put on car repossessions and other charge offs. All active accounts however will have to be in good standing. Finally, and perhaps not so good news, authorized user accounts will now be ignored in the scoring. What are authorized user accounts? Simply this. When anyone with a credit card in good standing requests that someone be added to the card as an authorized user, which means they are not responsible for the debt, the authorized users score will not be raised.

In the past parents have added their children as authorized users to help them attain a good credit score. This practice will no longer have any effect on the childs credit score. Additionally, any open accounts not in use could change a persons credit score negatively, as banks are shutting down accounts which are not in use.

Consistent with all my articles, I advise everyone, to be more concerned about clearing up any debt issues you may have, and worry less about being dependant on the banks money. If you need debt help please visit: DEBT HELP.

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Written By:
Steven Ciantro
Member National Association of Credit Counselors
American Debt Enders

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