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Clients intending to use seasoned trade lines to increase their credit scores are encouraged to disclose to any potential lender that such lines have been added.

There aren't many shortcuts when it comes to building and maintaining good credit. But one that has long helped boost the scores of young adults and spouses -- becoming an authorized user -- is about to close.

Last month, Fair Isaac Corp., which calculates the widely used FICO score, announced that the rating system would no longer recognize these "piggyback" accounts. The FICO score had included these types of accounts since the score's inception in 1998.

To create an authorized user, typically a family member puts you on a credit line, such as a credit card. The account history shows up on your credit report, presumably bolstering your credit profile or creating one where none existed.

For adult children who planned to take out a private student loan or rent an apartment for the first time, becoming an authorized user on a parent's credit card was a quick way to establish a credit score.

Fair Isaac only begins to calculate a score after six months of reported credit history. In addition, 15 percent of your score is made up of the length of that record -- the longer you have accounts open, the more it helps your score.

But in the last year or so it has become possible to buy authorized-user status on the accounts of strangers via the Web. One company, InstantCreditBuilders, will sell you authorized status on five credit lines for $3,500.

"Any consumer who uses a doctored FICO score in this way is committing loan fraud," said Craig Watts, public affairs manager for Fair Isaac. "We were fine with authorized user accounts so long as it was someone within the household who was learning credit management skills at the same time."

InstantCreditBuilders sees it differently in the wake of the housing boom.

"A lot of people need to refinance out of fancy mortgages," said John Coates, the company's Webmaster. "Not everyone has someone in his family with good credit. All we did is extend the family."

The company launched a Web site (http://www.stopfico.com/) in response to Fair Isaac's decision to discontinue authorized users in calculating credit scores. But the change in FICO's scoring model is set to occur in September.

If a piggyback account plays a significant role in your credit history, you could see your FICO score drop (or disappear altogether). To counteract the effect, consider these steps:

http://www.chicagotribune.com/business/yourmoney/chi-ym-started-0715jul15,0,6638918.story

FHA Secure: Senators Question Credit Rating Agencies "Changing from our present business model to an investor one, based on a law or requirement, I think is problematic," he said in an interview, saying that rating agencies need revenue from issuers of mortgage debt to pay their employees competitive salaries.Sen. Charles Schumer, D-N.Y., suggested a new business model for the rating agencies by having the existing agencies paid by investors in securities rather than their issuers of debt. But Stephen Joynt, chief executive of Fitch, was skeptical about that concept.The biggest rating agencies _Standard & Poor's, Moody's Investors Service and Fitch Ratings — are under fire from critics who say they failed to give investors adequate warning of the risks associated with mortgage-backed securities. Those investments are now plummeting in value as home-loan defaults soar, particularly among borrowers with weak, or subprime, credit histories.

Lawmakers are discussing overhauling the agencies business model. One idea, proposed by Columbia University law professor John Coffee, is for the SEC to calculate default rates for each rating agency and make that information public. Rating agencies that are especially inaccurate could have their SEC recognition revoked.Several members of the Senate Banking Committee questioned rating agency executives about whether they provided advice to investment banks that issue complex mortgage securities tied to subprime home loans.

WASHINGTON (AP) — Executives from major credit rating agencies on Wednesday were accused by senators of being hampered by conflicts of interest that may have contributed to the mortgage market turmoil rattling investors worldwide.

"It seems to me that credit rating agencies are playing both coach and referee," said Sen. Robert Menendez, D.-N.J.

Senators were particularly concerned with a key aspect of the agencies' business models: they get paid by the companies whose bonds they rate. That's like a film production company paying a critic to review a movie, and then using that review in its advertising, said Sen. Jim Bunning, R-Ky.

The rating agencies' seal of approval effectively concealed the true risks of those investments, lawmakers said, comparing the agencies' lack of foresight about the risks inherent in the subprime mortgage market with their failure to anticipate the collapse of Enron Corp. and WorldCom.

Executives from S&P and Moody's Corp. said their methodology for monitoring the risk of mortgage-backed bonds was sound, but also pledged improvement.

Vickie Tillman, executive vice president of credit market services for S&P, a subsidiary of McGraw-Hill Cos., said there is no collaboration between S&P and investment banks that issue debt, but acknowledged that the agency has an "open dialogue" with sellers of mortgage securities.

The Securities and Exchange Commission has been examining whether the rating agencies were prodded by investment banks to publish higher ratings for mortgage securities, chairman Christopher Cox said. The agencies are subject to SEC oversight enacted last year amid a push to encourage more competition in the ratings business.

Also Wednesday, Moody's said it supports some mortgage-market changes. Underwriters of mortgage securities, the company said, should be required to use a third-party reviewer to ensure information on loans given to investors is accurate. And Moody's said investors should receive more information on loan performance throughout the life of a mortgage.At the hearing, senators also wondered whether workers at rating agencies should have a specified waiting period before they go to work for investment banks — to avoid any incentive for bond raters to assign overly positive ratings. Michael Kanef, a managing director at Moody's, said his company would be willing to consider that idea.