Just when I thought that I had heard everything re lenders squeezing fees from subprime credit card holders ...
(snip)"The companies claim to raise FICO credit scores by 50 to 250 points by adding low-scoring borrowers as "authorized users" on the credit card accounts of people with FICO scores well in excess of 700. The positive payment information from such cardholders then flows into the files of the persons with subpar credit.
Federal law permits authorized users to be added to credit card accounts. Typically the users are relatives or friends of the primary cardholder. For example, a parent might add a son or daughter onto a Visa card in order to provide access to credit for the child or for use in emergencies.
Federal law, however, does not limit the number or prescribe the type of authorized users permitted on any single account. Nor does it prohibit the rental or sale of authorized user designations. Exploiting that loophole, numerous companies have popped up on the Internet offering to buy and rent out the credit card "trade lines" or accounts of credit card holders with high limits combined with perfect payment histories.
Big bucks -- and a strong potential for fraud on mortgage applications -- are involved. Some website promoters say they can add 80 to 120 authorized users onto a high-quality credit card account before banks or lenders get suspicious. Each account can rent for as much as $1,500 to $2,000 for a 180-day usage. The primary credit card holder receives a cut of the rental fee, often hundreds of dollars for each authorized user added to the account.
The person seeking a higher credit score does not obtain actual access to the credit card. But within 30 to 90 days of being added to the account, the national credit bureaus incorporate the primary cardholder's ongoing account information into the files of the authorized user. The score-raising attributes of the primary cardholder's stellar payment record then flow through to the new user.
One company based in Tampa, Fla., recently solicited mortgage brokers promising FICO score boosts of 150 to 205 points for applicants "in as little as 30 days" for the "discounted" price of $750 per trade line.
That widely distributed pitch prompted one state financial regulator to issue a "fraud alert" warning that "consumers, brokers and lenders that complete, submit or participate in the completion and submission of an application for credit that contains misrepresentations or false information are subject to administrative actions and potential criminal penalties by the state."(snip)
Now THIS sounds like an internet based business that could actually be profitable for 'small-timers' .... where do I sign up ??? I could definitely handle a $500 'cut' from each of 100 authorized users the internet bank wants to add to my credit card account.



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