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“Buying tradelines” refers to the practice of paying to become an authorized user on someone else’s credit card account, usually through a third-party company. Becoming an authorized user can help your credit scores, but buying tradelines comes with a variety of risks and should be avoided.
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There are many strategies you can use to try to establish or boost credit scores. One approach that’s been around for quite some time involves becoming an authorized user on someone else’s credit card account. Being an authorized user on a well-managed credit card has the potential to improve your credit scores.
The authorized user strategy starts with asking a loved one for a favor. You ask a family member or friend to add your name onto an existing credit card account.
But there’s another way to become an authorized user. You can pay someone you don’t know to add you onto his or her credit card account. This process is known as buying or renting a tradeline or, sometimes, piggybacking.
Piggybacking may seem like an attractive option if you don’t have a loved one who can add you as an authorized user. Yet before you rush out to try this approach, it’s important to understand what could go wrong.
Piggybacking on a stranger’s credit card is often expensive. And it doesn’t always work. Worst of all, renting a tradeline might be considered fraudulent in certain circumstances.
When you buy or rent a tradeline, you pay money for a stranger to add you onto a credit card as an authorized user (AU).
Here’s how the tradeline rental process works behind the scenes.
Warning: It’s sometimes possible to connect with a credit cardholder on your own to arrange a piggybacking agreement. Craigslist and similar websites are the types of places you might find such offers. But removing the middle man could make tradeline renting even more dangerous.
Tradeline companies often make big promises about how buying tradelines raises credit scores. And becoming an authorized user, even on a stranger’s credit card, may indeed be effective (see other ways to improve your credit scores).
According to a 2010 Federal Reserve Study, “…piggybacking credit can materially improve credit scores, particularly for individuals with thin or short credit histories.”
Yet tradeline renting involves significant downsides as well.
Paying to become an AU on a stranger’s credit card doesn’t guarantee you a credit score increase. So, there’s a chance you could pay a lot of money for a credit improvement strategy that won’t work.
Here are six reasons why piggybacking on a credit card might not improve your credit scores:
Tradeline companies can charge a lot of money for their services. You might pay anywhere from $150 to $4,000 (or more) to become an AU on someone else’s credit card.
Tradeline rental pricing often varies based on:
When you buy tradelines with high credit limits or older accounts (called “seasoned tradelines”), it’s typically more expensive. Why? Because there’s a chance these accounts might improve your credit scores more.
AU status on a credit card with a high credit limit and a low balance could lower your overall credit utilization ratio. Credit utilization is largely (though not totally) responsible for 30% of your FICO Score. An older account could improve the age of your credit. Length of credit history is worth 15% of your FICO Score.
Lenders, credit reporting agencies, and credit score creators (like FICO and VantageScore) all frown on tradeline renting. Some organizations go as far as calling the practice a scam.
But is buying tradelines illegal? It’s a gray area.
Experian warns that buying tradelines could put you in danger of committing bank fraud. If you pay money to piggyback on a stranger’s credit card and then misrepresent your true creditworthiness to a lender when you borrow money, it could be a problem — especially if you later default on the loan.
The Federal Trade Commission also says that piggybacking isn’t a good answer for consumers with bad credit. In 2020, the FTC went after a Denver-based credit repair company called BoostMyScore. The company was selling authorized user tradelines.
According to the FTC, BoostMyScore targeted vulnerable consumers with ads promoting the benefits of piggybacking. The company claimed buying tradelines would significantly improve credit scores and help consumers qualify for mortgages. But the company couldn’t back up their score improvement claims.
The term “tradeline” probably isn’t something you use in your day-to-day life (unless you work at a credit reporting agency). Tradeline simply describes an account that a credit reporting agency lists on your credit report.
Tradelines come in three primary categories — revolving, installment, and open. Here are some examples of each.
On your credit report, a tradeline includes a variety of information about your account such as:
There are other ways to rebuild your credit that are safer and less expensive than trying to buy tradelines.
Good credit scores are a crucial ingredient in your overall financial health. They can help you qualify for financing — like credit cards and loans — and save money in so many ways.
It makes sense to try to earn the highest credit scores possible. However, when it comes to credit improvement strategies, there are right ways to approach the process and there are wrong ways.
For example, there’s nothing wrong with disputing credit errors to remove inaccurate items from your credit reports. But it’s wrong (not to mention illegal) to lie and say you’re a victim of identity theft to force the credit bureaus to delete negative items.
In the same vein, it’s fine to ask a family member or friend to add you onto a credit card as an authorized user. The Consumer Financial Protection Bureau says that nearly 10 percent of consumers use this approach to establish credit for the first time.
Yet paying to piggyback on a stranger’s credit card account could be a problem. Sure, there’s a chance you might improve your credit and get away with it. But the risks of buying tradelines are too big of a gamble. You’re far better off educating yourself and building credit the right way.
Michelle Black is a leading credit expert, author, writer, and speaker with over a decade and a half of experience in the credit industry. She is an expert in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).
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