Software Flags Authorized User Accounts

A new credit management tool from CreditXpert, Towson, Md., introduced at the Mortgage Bankers Association's annual convention allows lenders to quickly and cleanly assess the impact of authorized user accounts on a borrower's credit score, the company says.Billed as an answer to the controversial practice known as "piggybacking," the firm's authorized user filter includes a two-step analysis of a borrower's credit file, first considering authorized user accounts and then excluding them, so lenders will know their effect on a credit score. An authorized user can be a spouse or a child added to a credit card user list, but firms have recently popped up to "rent" such status to the accounts of strangers to boost the scores of those with poor credit or no credit. One borrowed credit card account can boost a score by up to 45 points, according to a leading "rental company." CreditXpert estimates that 30% of credit files have at least one authorized user -- two or three are common, says managing director David Chung -- and six of every 10 of those will have a credit score change when accounts are removed in the scoring process. With CreditXpert AU Filter, Mr. Chung says lenders "can identify the borrower's true risk at a glance." The company can be found online at http://www.creditxpert.com.