Once it was simple to create a good credit history and increase your credit score. If a parent or spouse with good credit added you as an authorized user of a credit card, you could simply piggyback on that person's history. This was possible because Fair Isaac, the company that created the FICO credit score -- that magic number that can make or break you, credit-wise -- made no distinction between the authorized user and the cardholder.

Credit-repair firms took advantage of this loophole and fraudulently tried to sell authorized account access to folks with credit problems. Fair Isaac recently eliminated the loophole by changing the FICO formula. Now it calculates your score using only accounts in your name or joint accounts for which you are liable. If you have no such accounts, Fair Isaac might not be able to calculate a FICO score for you. And if most of your credit history came from authorized-user accounts, your score is likely to drop.

A gradual phase-in of the new FICO formula -- it won't be completely in place until spring -- gives piggybackers an opportunity to apply for credit while they're more likely to qualify and get a better interest rate. Then they can build their own credit history. -- Joan Goldwasser

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