I found myself on the CFPB website today. Mostly just checking out changes to the mortgage processes but I stumbled upon their monthly complaint statistics. While Credit Repair was quite a bit lower in complaints when compared to say, fast loans, or debt consolidation or collection agencies; we were still on the list. So were mortgage brokers, bankers and realtors unfortunately.
Scott and I talk about this a lot. Mostly when we get a call from someone who has had a bad experience with another organization. When ever that happens, we like to get an idea of who is doing what out there.
There has been a trend these past few years of complete and total fraud. It is called Tradeline Rentals. Basically, the way it works is, if you have bad credit, you can get someone with good credit to add you to one of their accounts, thus building up the scores. Sounds like a good idea right??
No... it isn't.
Who here's seen the movie 'The Big Short??', great movie. Great movie. It covers a similar concept, which is... folks getting loans based on manipulated credit. Most folks can understand that misrepresenting your credit by having a stranger's credit line on your score would not be looked upon favorably by the good people at the CFPB. That is exactly, or similarly what got us into the mess on 2007.
However, you can see how credit repair companies who are offering this as a service may be misleading folks. Starting out a relationship on a lie is not a good thing. That is in effect what they'd be asking you to do though, lie about your credit report.
Also, remember, should a lender find out that a single trade-line is not truly yours, the loan would be null and you could lose your house or car. It's just sneaky.
So, if you are offered that as an option, realize, not only is it not the right way to do things, but it is also illegal and can land you in some hot water with both the lender and the government. Both if you are a recipient of these trade-lines, or if you are one of the credit report organizations who are offering it...
I guess the take a way is, be careful out there gang. Call us if you have questions.
Ed-Jack Dvorak is National Affiliate Liaison at Credit Dr., a national credit restoration company. He works with clients and creditors to improve credit profiles.