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renting your credit score

dwnsouth

dwnsouth

Analytical nerd
Platinum Member
http://www.suntimes.com/business/413023,CST-NWS-cash04.article

or

http://www.suntimes.com/business/413023,CST-NWS-cash04.article

Bad credit score? Rent a good one
GETTING A MORTGAGE | Internet firm offers quickie boost -- but lenders cry foul

June 4, 2007
BY J.W. ELPHINSTONE
Only a low credit score stood between Alipio Estruch and a mortgage to buy a $449,000 Spanish-style house in Weston, Fla.

Instead of spending years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

The result was a happy ending for Estruch, but the growing practice is sending shivers through the mortgage industry. And after being contacted for this story, Fair Isaac Corp., the developer of the widely used FICO score, said it will change its credit scoring system to end this mortgage loan loophole.

Instantcreditbuilders.com, or ICB, helped Estruch boost his score by arranging for him to be added as an authorized user on credit cards of people with stellar credit who were paid to allow this coattailing. Parents use this practice when they add their children to their cards.

The pitch to those who are renting their credit history for pay is seductive: You don't need to worry about users of this service receiving duplicate copies of your credit cards, account numbers or any of your personal information.

It's essentially free money, they are told. Duplicate cards that are issued to the credit renter are destroyed.

Lenders are worried, however, that they're taking on greater default risks by unknowingly offering lower interest rates than they otherwise would to applicants who artificially boost their credit scores. Their trade group has complained to the Federal Trade Commission.

Estruch paid $1,800 in December for three credit card spots. In March, he closed on his four-bedroom stucco house.

''I had a great mortgage history, but I got hurt because of my credit score,'' said Estruch, who also works as a mortgage broker.

ICB's founder, Jason LaBossiere, said he sees his business as a second chance for the consumer. ''People who are our clients are spending an incredible amount of money to get their finances back in order,'' he said.


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do you think its legit? or worth the effort?
 
I was just about to post this thread when I read the one you posted. I wish I knew about this a while ago b/c when I opened up a checking account they told me that I had a 745 (that was with Transunion though).


Credit-Rating Standard Tightens
By JACLYNE BADAL
June 7, 2007; Page D6
Fair Isaac Corp., the company behind FICO credit scores, is shutting down a fast track to a better credit rating.
Starting in September, consumers who are added as an authorized user on someone else's credit card will no longer be able to benefit from that card's credit history. The change reverses the current practice, known as piggybacking, which treats all authorized users the same as the cardholder.

Here's how it works: Say a mother has a gold card with a $10,000 credit limit and a typical $1,000 balance that she's paid on time since 2000. If she added her 18-year-old son as an authorized user today, his credit score would get a quick boost, because it would look like he, too, had a card with 90% of the credit line free and a perfect seven-year history.
Credit scores improve when a person keeps balances low relative to limits and pays bills on time for long periods.

In an interview last year, a Fair Isaac spokesman said the company allowed the quirk because it didn't have any proof that people were gaming the system to lenders' detriment. But after researching the market and discovering a number of companies that sell the right to become an authorized user on complete strangers' credit accounts, Fair Isaac decided it was time to close the loophole, according to Ron Totaro, vice president of global scoring solutions at the Minneapolis-based company.

Seasonedtrades.com and Instantcreditbuilders.com, which sell the right to be an authorized user, didn't respond to requests for comment about how the decision would affect their operations. Such services have been known to charge customers $1,000 to $3,000 and to promise to boost scores by as much as 200 points. (FICO scores range from 300 to 850.)
Fair Isaac estimates roughly 1% of consumers will be affected by the change. The decision is part of a broader overhaul to the model used to generate FICO scores. The company plans to introduce its new product, FICO 08, to one of the major credit bureaus -- Equifax, Experian or TransUnion -- in September and to roll it out at the remaining two early next year.

Fair Isaac, which fine-tunes scoring models every couple of years, says the FICO 08 model will heighten lenders' abilities to make predictions about people with scant credit histories.

Families who employ piggybacking to help children or new spouses jump-start their credit have other ways of achieving their goal. Mr. Totaro says joint users on an account, like authorized users, get the benefit of the card's entire history, but joint users are accountable for the debt on the card while authorized users are not. Additionally, family members with good histories can cosign loans to help loved ones secure credit.
 
Thank GOD, someone else was paying attention. I saw this interview on CNBC and CNN last week on my way to sleep and did not get a chance to record the ip address. Man, you are a lifesaver.

I am going to answer your question indirectly. Once you do your homework and find out that a wealthy "family" owns your credit score, you then know that the U.S. lives up to all the bullish that you thougth it did. How am I going to let another homan being decide how creditworthy I am? Now look at IBC. It is run by people. Any different? Do it!
 
I was JUST reading about this this morning and I have already forwarded the article to about five friends and family members.

They fucked up when business that offered "piggybacking services" started popping up everywhere. It was only a matter of time.
 
Bottom line, uncomfortable or not, it is LEGAL. What was so funny about BOTH interviews is that the critics were not saying that piggybacking was wrong. They were mad because this cat EXPOSED THE LOOPHOLE and is allowing poor, middle class and the like to do what the rich have done all along...get wealthy off of OTHER PEOPLE'S MONEY.
 
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