Authorized User Status: A Strategic Asset or Hidden Risk in Credit Scoring?

The credit scoring landscape has evolved dramatically since 2025, with profound implications for anyone leveraging authorized user (AU) status to build or repair their credit. While AU accounts remain a popular tool for financial inclusion, the treatment of these accounts by FICO and VantageScore models now diverges sharply, creating both opportunities and pitfalls.

The FICO Approach: Balances Ignored, Limits Included

FICO 8 and 9—the dominant models used in most lending decisions—exclude the primary account holder’s balance from AU credit scores. This reflects FICO’s stance that AUs are not financially liable for the debt, so their scores should not penalize them for the primary’s behavior. However, the primary’s credit limit is still factored into the AU’s total available credit, indirectly influencing their overall credit utilization.

For example, an AU on a high-limit credit card (say, $20,000) but with a $0 balance could see their total available credit rise, lowering their aggregate utilization ratio and potentially boosting their score. Yet a quirk persists: if all AU accounts report a $0 balance, FICO 8/9 scores may dip slightly, as the system interprets inactivity as less beneficial.

FICO’s stock performance since 2020 reflects its ongoing dominance in the credit scoring market, with steady growth as lenders rely on its models. Yet its narrow approach to AU treatment highlights risks for users tied to unstable primary accounts.

VantageScore’s Inclusive but Riskier Framework

VantageScore 4.0, adopted widely in auto lending and other sectors, treats AU accounts more aggressively. Unlike FICO, it includes the primary’s balance in the AU’s utilization calculation, making high balances a direct threat to the AU’s score. For instance, if the primary carries a $5,000 balance on a $10,000 limit, the AU’s utilization jumps to 50%, potentially lowering their score.

VantageScore’s inclusion of trended data and its transparency with lenders (allowing custom scoring solutions) also set it apart. However, its strict balance inclusion makes it riskier for AUs whose primary users carry debt.

Regulatory Shifts and Broader Impacts

The CFPB’s 2025 rule banning medical debt reporting has indirectly boosted scores by an average of 20 points for affected users, particularly those with thin credit files. This change, while unrelated to AU treatment, underscores a broader shift toward more forgiving credit criteria. Meanwhile, VantageScore’s CreditGauge report revealed rising auto loan delinquencies, a trend that may pressure scoring models to adapt further.

Strategic Implications for Investors and Consumers

For investors in consumer finance, these shifts highlight opportunities and risks:
- FICO-Driven Markets: Mortgage lenders still favor older FICO models, but younger users might benefit from AU status on high-limit accounts under FICO 8/9.
- VantageScore-Driven Markets: Auto lenders using VantageScore 4.0 may penalize AUs tied to high-balance accounts, favoring those with stable primary users.
- Credit Inclusion: VantageScore’s ability to score an additional 33 million consumers could expand markets for credit products, benefiting lenders like Equifax (EFX) and Experian (EXPN).

Equifax’s stock rise since 2020 mirrors its role in VantageScore’s growth, as its credit data becomes more critical to scoring inclusivity.

Conclusion: Awareness Is the Key to Advantage

The 2025 model updates reveal a critical divide: FICO offers AU users protection from primary balances but limited benefits, while VantageScore’s inclusivity comes with risks tied to primary behavior. For investors, the choice between these models impacts lending strategies and credit product design. For consumers, knowing which scoring system lenders use—and the financial health of primary users—is non-negotiable.

With average credit scores rising by 20 points post-medical debt reforms and VantageScore’s market penetration expanding, the credit reporting landscape favors informed decision-making. Whether leveraging AU status to boost scores or avoiding ties to unstable accounts, the stakes have never been higher—or clearer.