Software Finds Borrowers Using Credit-Lifting Ploy

American Banker (08/25/08) P. 5; Berry, Kate
New software from Cogent Road LLC can gauge whether mortgage borrowers have listed themselves as authorized users on another person's credit account as a way to boost their own credit scores, with early tests indicating that approximately 2 percent of borrowers had done so. Lenders have long been concerned about credit repair services that allow borrowers to pay a fee to be listed as authorized users on the credit accounts of complete strangers, who receive a portion of the fee; under such arrangements, authorized users do not have card access to the account. Cogent Road managing partner William DiPaolo believes the problems with authorized users could be eliminated if the credit bureaus gave authorized users separate credit accounts that take their actual payment histories into consideration. Fair Isaac wanted to remove authorized users from the credit-scoring equation, but provisions of the Equal Credit Opportunity Act to curtail race and gender discrimination prompted the company to revise its plans.