What's wrong with the new FICO formula


Geoff Williams wrote about the new FICO score earlier this week. Now I will be geeky enough to actually explain what I don't like about the new formula.

FICO 08, as it is known, will still give credit to authorized users including children and spouses. Fair Isaac had originally said that it would do away with authorized users because of the potential for abuse, but has apparently changed its mind.

Here's what's so unfair about this: Children of parents with good credit will be able to piggyback off their parents' scores and develop high credit scores early in life. Children of parents with poor credit -- who are more likely to be disadvantaged in other ways -- will have to build up credit on their own. That takes time and could delay their ability to buy a home or make other credit-dependent purchases.

Do we really need to give one more advantage to the children of affluent people? They've already won the ovarian lottery, and now we need to give them a head start with good credit too?

Credit piggybacking is, dare I say it, un-American, and flies in the face of the ideals of personal responsibility and rugged individualism. It's disappointing that FICO opted not to do away with the practice.