Low credit score? Just add some trade lines from a credit repair company…..
…….. And ‘go to jail’
I know all the tricks. I hear about the techniques. I know that people can read the “Fair Credit Reporting Act” or “Fair Debt Collections Practices Act” and use that info to remove some bad stuff from their credit reports. I have even seen folks get added to mommy’s credit card as an “Authorized User” to boost their credit depth, and FICO scores as a result.
But, have you heard the latest craze? It’s called “Piggybacking“. For a fee, an internet site will add you to a good credit card with a high limit, low balance and perfect payment history revolving credit account. Net result? 50+ FICO point boost!!!
Some people call this practice, at best, deceptive. Others inerpret this as flat out “Mortgage Fraud”. What say you… Ed Rybczynski? What do you think a loan officer should do when they find out about this? My answer? “Deny the loan”. Why? Well, I blogged about it here => http://activerain.com/blogsview/22154/The-dangers-of-Credit ….. any questions?
While I haven’t seen or heard of any law against this practice… I DO BELIEVE that the current laws can be used to interpret Piggybacking as fraudulent behavior.
Food for thought…. and reason to be very skeptical of any credit repair companies.
Tom Burris
DallasLoanGuy.com
Dallas, TX
Texas Home Loans
“A Home Loan for Every Texan”
http://www.dallasloanguy.com/
i agree that having a service that hooks u up with a stranger’s credit card should be regulated or discontinued. However, I disagree that the loan should be denied if a loan officer found out. First it would be next to impossible for a loan officer to find out, it’ll appear as just another trade line, no reason to investigate it…it just wouldnt happen. Nextly the redit bureaus do so many things that are geared towards ruining your credit it’s ridiculous, i see handling your credit like playing a game. Credit rating should be simple, do u have bills and do u pay them…nothing else should matter but everything from how many times someone looked at your credit to whether you use more than 30% of your available credit is factored and i think that is ridiculous since most creditors dont look at anything more than your credit score and your score fluctuates based on things that have nothing to do with you paying your bills…I don’t want to get on a soap box because i could go on forever discussing the illogical practices of the bureaus but I feel if you figure out how to play their game, legally, you should go for it.
Comment by andre — May 16, 2007 @ 10:04 am
Andre,
Having an AU account isn’t a bad thing. My problem is with ‘manipulating’ the FICO. Like getting added to Mommy’s credit card for that 30 point FICO boost to get into a loan pool that you really do not belong. I see this as a future problem.
I think 99.99% would agree that the online services is fraud!!!!
Comment by tomburri — May 16, 2007 @ 10:26 am