I have heard they will be fixing it soon. Any ideas?
2007-07-23 16:46:03 · 6 answers · asked by Dmitry M 1 in Business & Finance ➔ Credit
It's called "Piggbacking" and it was great for parents. They could add their children as authorized users on their credit cards and the next time the credit bureaus updated all of the good long credit history the parents had showed up on the children's credit report.
Then along came a company called Instantcreditbuilder.com and screwed everything up. They sold "seasoned" trade lines to people so they could raise their score and qualify for loans that they really did not deserve.
This helped caused the sub-prime mortgage industry to almost collapse and has caused thousands of foreclosures all over the Country.
The mortgage industry lobbied the FTC and in September 2007 the way credit scores are calculated will change for FICO and people will no longer get the additional points for being authorized users. Not only that, it will be retroactive so anyone who did get additional points in the past will lose them.
All because someone was trying to cheat the system.
2007-07-24 03:42:23 · answer #1 · answered by ? 7 · 0⤊ 1⤋
I actually disagree that the practice is illegal...the CREDIT BUREAUS may think it's illegal, but notice from the article that they didn't mention a particular law.
You cannot stop someone that is 18 and over, from adding someone as an authorized user to an account, if the creditor is going to allow it.
Obviously, this practice is going away due to the change in their system...but as a bottom-line theory, with two consenting adults, I see absolutely nothing wrong with it.
The credit bureaus created the system, and they shouldn't be suprised when someone finds a way around it.
2007-07-23 22:29:12 · answer #2 · answered by Expert8675309 7 · 1⤊ 1⤋
Credit 'piggybacking' will be repealed by FICO in September 2007 to make matters worse they will be doing this retroactivly so that anyone who recieved a benifit from this in the past will loose the benifit they gained.
I haven't heard of any new loopholes anyone has found, but I am sure someone will find one sooner or later!
2007-07-23 16:55:29 · answer #3 · answered by Anonymous · 1⤊ 0⤋
No. I don't believe it either. Each of the bureaus has their own method for calculating so it is hard to imagine they all have the same glitch that you would like to exploit.
2007-07-23 16:53:54 · answer #4 · answered by Rich Z 7 · 1⤊ 0⤋
yeah, its called paying your bills. There is no glitch, and if there was, its doubtful that it would be made public.
2007-07-23 16:54:15 · answer #5 · answered by David L 6 · 0⤊ 0⤋
It's illegal. Here read this:
http://abclocal.go.com/wjrt/story?section=consumer_affairs&id=5379085
2007-07-23 18:29:05 · answer #6 · answered by Anonymous · 0⤊ 0⤋