A credit report seasoned trade line is a method of allowing strangers with bad credit to become authorized users on a credit card account of someone with good credit for a fee. This is also known as piggybacking and can be very helpful to people who have bad credit and fear they will never be able to have good credit. Of course, there is some controversy to the credit report seasoned trade line business.
The benefit to the person with bad credit will have an account with excellent credit history listed on their credit report which will raise their credit score. The cost of a credit report seasoned trade line will run anywhere from $500 to $2,000 depending on the credit history of the new account. The person with the good credit receives from $100 to $150 for this with the rest of the money going to the middle man that set up the seasoned trade line in the first place.
Of course, there is a risk for the person with good credit. The person with bad credit may charge the credit card account and then not pay it back thus causing damage to the good credit person. The brokers who provide the service claim that they never provide the entire account number to the recipient, however they may find it out anyway because the entire number may appear on some credit reports.
A logical question that comes about when exploring a credit report seasoned trade line is whether or not it is legal. The FTC says that what they have been advised about from their lawyers is that it appears to be technically legal. The agency, however, is not saying that it is legal. The credit report seasoned trade line practice could be fraudulent if, as required by the contract, a borrower does not disclose pertinent facts relating to that person’s ability to pay back a loan.
Fair Isaac Company who is the inventor of the FICO score which is your credit rating says they will no longer take into account authorized users when determining a credit score. That means that a credit report seasoned trade line practice may become obsolete.
This is a double edged sword since it will stop the practice of seasoned trade lines appearing on credit report; however it will negatively affect students who use their parent’s cards and spouses with little credit history of their own. A seasoned trade line can help a person with bad credit show good credit on their credit report, but it may not be legal and we think it won’t even be available in the future anyway.