D' Finance Bench

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Is Buying Better Credit Ethical?

If you have a low credit score, it can have many different repercussions.

A low credit score can affect whether or not you get a mortgage or any other kind of loan. A low credit score can also lead to having a higher interest rate on credit cards. Having a low credit score can also mean being denied for an apartment rental, house rental, or many other necessities.

There are some people with low credit scores that believe they have found a loophole in the system.
If you are an authorized user on a person’s credit account, that person’s account history will actually appear on your credit report. If the other person’s credit account has a positive payment history, you can actually see an increase in your own credit score simply by being included on their accounts.

Even if your credit score is low, if you add several of these other accounts to your credit history, this can actually increase your credit score enough to get approval for a loan or even obtain a better interest rate.

There are actually some companies that offer a service where you pay a fee to borrow someone else’s credit information and apply it to your account.

The way it works is that you pay a company a fee. (This fee can range anywhere from a few hundred up to several thousand dollars depending on how many accounts you want to add to yours.) You give your name and Social Security number to the company and the company will find people that have good credit accounts and will add you as an authorized user to those accounts.

Once the card company has reported this to the different credit bureaus, you’re taken off the accounts.

Believe it or not this is actually legal. The problem is that it’s dishonest. The reason that credit scores exist is to help provide some kind of a safety net for lenders. Being able to deny credit to those who have low credit score helps them to protect their assets.

While the practice of buying better credit might be legal, it certainly is not an honest way to obtain credit; and all consumers pay for this dishonest practice in the long run.

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September 23, 2012 - Posted by | Credit Repair | , , , , , ,

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