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Credit Card eZine - News and Articles about Credit Cards

Credit Card eZine - News and Articles about Credit Cards

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Credit card issuers - pros and cons of authorized user for improving credit score

2011-09-07

With the economic upheaval, obtaining a credit card seems a distant dream, especially if you fail to qualify for any credit card application. Nonetheless, turning into an authorized user, i.e. attaching yourself with a good-quality credit customer`s account and the consent to use it, would boost your credit scores swiftly, and jump start your credit history.

The authorized user scheme is highly beneficial for students or young adults who fail to become legible for standard credit cards with low interest rates and no fee. Typically, it is their parents or relatives who attach them to their good credit accounts, and allow them to use it, thus, facilitating an improved credit rating.

Only recently, credit card issuersdetected several cases of exploiting this method, and subsequently declined to consider the records of an authorized user in the calculation of their credit scores. The fraudulent methodology of Piggybacking involved the illegal supply of good credit accounts to customers with dented or limited credit. Consequently, the customer could effortlessly avail and restore access to the high-quality applications for a pre-determined rate.

The authorized user model failed to become an effective yardstick due to lack of evidence of genuine credit behavior and user. Although the authorized user paid to improve their credit score, yet the credit card may never arrive in their mailbox, let alone the dream of using it.

The financial institution may never suspect the customer of fraudulent behavior, and hence would offer discounts, offers and attractive gifts to illegal credit card holders. The result is nothing but huge dents in the revenues and eventually the nation`s economy.

The authorized user model invented by Fair Isaac Corporation took a new turn to dissolve the risks posed by deceptive authorized users. Although, numerous fraudulent companies still continue to play an unfair game, but the new method devised does not take into account the authorized user trades to compute credit scores. Hence, you cannot improve your credit ratings via authorized user system. Unfortunately, the honest authorized users have lost tremendously on trying to improve their credit ratings.

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[Sunday, December 18, 2011]
Chase Bank recently announced the redesign of its Visa credit cards - allowing more space on the front for the Chase logo. This new design is in trial mode currently but Visa has pans to roll out its new design to other financial institutions in order to increase the branding and logo visibility of the individual issuing banks.
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[Friday, October 28, 2011]
Debit and credit: they`re both plastic, why not consolidate them? The Cinncinati-based Fifth Third Bank, is the first to offer the DuoMasterCard which consolidates both a checking and a credit card account into one card.
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[Wednesday, September 21, 2011]
It really pays when you do the right thing. Take credit cards for instance, having a clean credit profile really does help. Those who managed to maintain a squeaky clean credit report during the recession can now jump with joy, as they will get some of the best deals from credit card issuers.
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