Equifax, VantageScore Mitigate 'Authorized User' Credit Deception

Over the past several months, a practice in the consumer credit market has come to light that sees individuals paying to become authorized users on credit card accounts of people who have excellent credit. These people use their purchased "authorized user" status to artificially boost certain credit scores to gain access to a loan or loan terms they otherwise would not qualify for. "Piggybacking" on someone else’s credit is a major concern to lenders, especially within the mortgage community, who are trying to protect their businesses from loan delinquencies and foreclosures.

In the wake of these concerns, Equifax Inc. (NYSE: EFX) emphasizes that VantageScore and the Equifax Risk Score 3.0 are not – and never have been – impacted by the authorized user manipulation. Authorized user information is excluded in calculating both VantageScore and the Equifax Risk Score 3.0.

"Being an authorized user on someone else’s account does not demonstrate an individual’s ability to pay their credit obligations. For this reason, it does not make sense to include authorized users in the calculation of a credit score," said Lisa Zarikian, who leads Equifax Predictive Sciences and was a member of the team that created VantageScore.

While it is not illegal for consumers to be authorized users on accounts, Equifax believes it is misleading to embellish one’s credit history in order to obtain financing. Equifax will continue to dedicate resources to deepening its understanding of the problem and assist lenders in obtaining the most accurate assessment of an individual’s credit risk.

VantageScore, a credit score jointly developed by Equifax, Experian and TransUnion, is a direct result of market demand for a more consistent and predictive approach to credit-scoring methodology across all three national credit reporting companies. Introduced to the market in March 2006, VantageScore is recognized today as an effective risk management scoring solution.

All three credit reporting companies use the same VantageScore algorithm to calculate the credit score. VantageScore leverages the collective experience of the industry’s leading experts on credit data, scoring and analytics.

Through complex analytic models, Equifax Predictive Sciences mines data to generate new intelligence for customer decisions. The result is the opportunity for our customers to offer more products to more of their consumer and business customers. For more information about Equifax solutions, visit http://www.equifax.com.

VantageScore is being independently marketed and sold separately through each of the three national credit reporting companies via licensing agreements with VantageScore Solutions, LLC.