TradeLine’s Quick Credit Score Fix—Is It Legit?
By Foreclosure-Fighter Staff Writer
If you're anything like most Americans, you're probably concerned about your credit score. And with good reason. These days, credit scores are affected by everything from opening a store credit card to how promptly you pay utility bills to what percentage of your available credit you're using.
And, as companies realize the incentive to keep credit scores high, more and more are reporting debts to the credit reporting bureaus in hopes of getting consumers to pay.
Credit scores determine what kinds of loans borrowers can qualify for, and so indirectly allowed for the current foreclosure crisis. Many borrowers who didn't qualify for traditional home loans were offered subprime and adjustable-rate loans—hundreds of thousands of which have since gone into default.
Families struggling against impending foreclosure who don't qualify for President Bush's recently announced rescue plan are likely seeking alternative ways to improve their credit scores and save their homes. And TradeLine Solutions, Inc. knows it.
TradeLine markets itself as a company capable of increasing the credit scores of its clients and "getting results," according to its website. How do they do it?
Sources indicate that TradeLine allows its customers to purchase the privilege of being added to a "seasoned primary account," which means an account including a loan that has recently been completely paid by the original borrower.
Because the loans are paid in full, they positively influence the credit score of all those whose names are on the loan's paperwork. TradeLine's website indicates that customers should see improvements in their credit scores within 30-90 days, although faster results have occurred.
Sounds great, right? Improve your credit score almost instantly for around $1,200. But is this practice legal?
TradeLine's site insists that all its practices are "100% legal." But Ted Stearns, TradeLine's Chief Executive, has been quoted by many sources for the following comment: "Are there people out there who are going to say that it's mortgage fraud? Sure, there could be."
Makes you kind of wonder.
Reports from sources including the Los Angeles Times, the Seattle Post-Intelligencer, and the Denver Post have mentioned the questionable nature of TradeLine's offered services. Using false information to get a loan is a crime.
Sources indicate that, depending on whether or not the participating banks are federally insured, TradeLine's scheme could be considered bank fraud or grand theft. But TradeLine has not revealed which banks are allowing it to offer customers access to seasoned primary accounts.
On the other hand, officials have noted that adding a new borrower to an account is fairly common practice—when that loan is still not fully paid (think buying a car secondhand).
Some view TradeLine's practice as a variation on "piggybacking," or adding someone as an authorized user to an established line of credit so that that person can improve his credit score. But, since Fair Isaac has revised its guidelines for 2008 to eliminate any benefits gleaned from being an "authorized user" on a strong account, companies like TradeLine are thinking of new ways to help their customers' credit scores.
So what's the verdict on buying better credit?
Authorities have no firm proof that this practice is illegal, but schemes that advertise instant or immediate solutions for deep-rooted problems are generally very risky (foreclosure rescue scams, anybody?). Before making any purchases from TradeLine or a similar company, consider contacting a non-profit credit counseling agency for advice.