I read an article on one of the major financial sites about how people are paying to be added as additional users on credit cards owned by those with well established credit lines. They claim that the "purchaser" will not actually have access to your card, and will not receive any critical information. These services are claiming some pretty decent returns.
Has anyone tried this and sold their info? I was thinking about calling them and asking for more info. It looks like this might only be around for another 6 months or so as the major bureau's will be changing their formulas for the scores.
It's a dangerous thing to do. Even if the person never has the information, they just need to pull a credit report to find out what bank to contact to get a replacement card.
Dan. First, the concept reeks 'scam', does it not? Bad enough I have to shred all my mail for fear of my identity getting stolen, now someone would offer to 'rent' my good history to a lesser credit worthy person? No system is perfect, but FICO scores have a purpose and this 'renting' undermines the intent. Given universal default, won't their default on one of their credit accounts hit my report as well? You didn't post any link, but googling [rent your credit rating] led me to enough articles on the topic. One of the first articles made it clear that Fair Isaac will likely shut down this sharing as it does nothing for them and distorts the true credit worthiness of the 'rating borrower'.
I believe people have been doing this for years, but not in the way intended (to improve a stranger's scores). Generally when you share a credit account (add an authorised user), the account gets reported under both SS #s. In my case, when I married my wife, she had ZERO credit (not from this country). I added her as an authorised user on a bunch of my cards and a lot of my "good behaviour" transferred to her and she then had extremely high score. We could then apply for loans together, etc. Eventually using my joint accounts, she was able to build her own history, with her own cards, and now I actually would prefer it if things were treated separately (i.e., if the cards we share aren't reported on BOTH reports) since it doesn't matter too much.
I think this is something that a lot of people have done.
Just imagine instead of your wife, it's a stranger. And there's a broker in between (like an escrow service) who ensures that the stranger NEVER gets access to your information or card (it's an issue of trusting the broker, but let's assume you do, like you trust escrow agents). So I think the danger of your credit being hurt when you "rent" it out is not that high, but I don't need the money. But apparently some people make up to $2000-$3000/month doing this.
It is capitalism, something I hear people think what this country is all about. If you're willing to "rent" your score, so what?
How will the renter identify themselves? Last four digits of primary card holder? CVS code on the back of the card? Full card number (which is rarely present in CC reports)> And so on. In ALL my experience, the authorised user cannot add additional users or request a replacement without confirmation of the primary cardholer.
Even a request for a replacement card is made and sent it'll be sent to the address on file.
The last four digits is on most of my credit reports. I have requested a replacement card on an AU account I have from my wife. She was not involved in the call.
While I haven't tried to have it sent elsewhere, all the major lenders claim they can get a replacement card to wherever you are in a certain amount of time.
Just because it is capitalism does not mean it is OK. In this case, renting your score is misleading the lenders. It may be legal, it may not be fraud, but it should set off ethical alarm bells.
Thought I'd piggyback your post, as this is what I was thinking this morning. If one assumes that the renter has zero risk, and the new borrower has just saved himself money despite the fee split between the renter and the middleman, then in a zero-sum world, the loser is the lending institution. While no system is perfect, I've heard little outcry that the FICO system is unfair. In the end, this practice will undermine the system and raise cost of borrowing across the board. Do we really want that to happen? I agree with you that it crosses the line of ethics, and I'd be happy to see the credit reporting agencies shut it down. JOE
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