Apr
01
2009

Purchasing “seasoned tradelines” likely to land you deeper in debt

Dear Experian,

Can purchasing seasoned tradelines help repair my credit?

- SMI

 

Dear SMI,

I’m sure you’ve heard old cliché: if it sounds too good to be true, it usually is. This is no exception.

Your money would be better spent paying the debts you owe than wasting it on a credit repair scheme that in the long term will likely only dig you deeper into debt. You only have to look at the current economic crisis to see what happens when people take on more debt than they can really afford.

The concept is that you pay a stranger hundreds or sometimes thousands of dollars to add you as an authorized user or joint account holder on their credit card. The goal for most people I talk to is to raise their credit scores just enough to qualify for a new loan.

There are a number of problems with that concept.

First, the reason most people can’t qualify for a new loan is that they are already over-indebted. The last thing they need is to take on more debt.

Second, if you have hundreds or thousands of dollars to give to someone, you are better off giving it to your creditors to reduce the debts you owe. Reducing your debts and subsequently paying your bills on time – every time – will enable you to rebuild a strong credit history, which will be reflected in equally strong credit scores.

Third, the scheme doesn’t work for many people. Despite the claims you hear, my experience has been that people see very modest increases in their credit scores, if any at all. Their scores don’t jump from very bad to excellent. Instead, they increase from very bad to slightly better but still very bad, and they still don’t qualify for the loan they want.

Those who do qualify often find themselves with another debt they can’t pay and end up worse off than when they started.

The other thing that would make me nervous is that you are linking yourself to the credit accounts of total strangers. Does that put you at any kind of risk, either from how the accounts are used or in terms of fraud? I don’t know the answers to those questions, but they seem reasonable to ask.

The only way to truly “repair” your credit is to reduce your debts and pay your bills on time. With patience and commitment you can restore your credit history, which will be reflected in strong credit scores.

That takes time. Depending on how severe your problems are, it could be months or even years, but you can do it.

Thanks for asking.

- The “Ask Experian” team

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