08 Jul 2019

Requiem: Is Credit Piggybacking a Scam?


Recently, a credit repair and tradeline company was shut down by the FTC. According to the FTC’s complaint, the owners scammed people out of $6.2 million dollars over the course of their operations since 2014. If you want the details, the press release is here. This company had several websites where they claimed to be able to boost credit by removing negatives and inquiries, then adding tradelines afterwards to shoot the score up even more. 

So what happened? Does this mean that all companies, even the “best tradeline companies” are out to take your money and give nothing in return? No. This company, who used several different websites and shady practices, was out to make a profit by selling false promises while utilizing illegal business practices. 

Let’s break down what happened.


First: Selling Tradelines is Not Illegal

Are tradelines illegal? There is nothing illegal about paying someone or a company to be added as an authorized user on someone else’s credit card. In essence you are renting data that helps give you a credit boost. While you are an AU, you have a window to attempt to achieve your financial goals, which likely involve some type of lending, be it mortgage, auto, business, personal loans, or credit cards. 


Second: Credit Card Piggybacking is Not An Exact Science

One of the things this now-defunct company did was promise certain scores within a certain amount of time. They took advantage of people’s needs by playing into a fantasy.

Everyone is looking for certainty. If we spend money we want to be sure we get the results we want, but adding tradelines is not a guaranteed better score.

 Anyone who uses the words “promise” and “guarantee” when it comes to your credit score is trying to scam you, because they, us, and anyone who isn’t, the Fair Isaac Corporation cannot know how your scores will be affected. Do we have an idea? Yes, we wouldn’t have tradelines for sale if there was no benefit. This niche industry wouldn’t exist if it didn’t work, but you must be careful to understand what is guaranteed. The line posting on 2 of the 3 bureaus, the line having low utilization (below 10%), the line having perfect payment history–these are legitimate guarantees because we can control these things. Even the best tradelines are worthless if any of the three categories are violated on the tradeline.


Third: Tradelines for Credit Repair Have Some Strict Laws

When engaging with someone professional in any type of credit repair: removing negatives, or adding seasoned credit tradelines, the law states that the company or person cannot take possession of the funds paid until the job is complete. This means that it is illegal for someone to say they will clean your credit, take money, and spend it. The funds must be held in an escrow account until the job is completed. 


Fourth: Buying Tradelines Does Require Some Common Sense

One of the things this company did was threaten legal action against anyone who publicly complained about their lack or results, due to “anti-disparagement and anti-chargeback contract clauses” they put in their contracts. So, this company had seasoned tradelines for sale, and they said if you didn’t get the results you wanted, and you complained, they would sue you. That should make just about anyone wary of signing on the dotted line. If you’re getting trade line credit added to your report, you should have a good idea of what happens, you should not be surprised and upset after they post. This goes back to being careful about what you are paying for. Plenty of people in business will promise you the moon and disappear. 



If you click on the press release link and see the companies involved in the FTC lawsuit, you can google their names and see their reviews. 

There are plenty of bad ones. 

As we said earlier, buying tradelines to boost credit score profiles is not a highly precise endeavor, but when reading the reviews of this company and their services online, you can see they were scamming people. 

This is why online reviews are so important. If you are buying tradelines, how are the reviews? 

The bottom line with this company is: they weren’t out to help people, and it was because so many customers complained (rightfully) that this company is no longer in business.