Are Tradelines Legal?
Disclosure: We’re not lawyers. We’re not giving legal advice. If you’re looking for a legal opinion, you need to retain an attorney. This page is more of a research paper that you can use for topics to bring up to your attorney, but you cannot rely on it for legal purposes.
Are tradelines illegal? Not yet!
“This is possible because creditors generally have followed a practice of furnishing to credit bureaus information about all authorized users, whether or not the authorized user is a spouse, without indicating which authorized users are spouses and which are not. This practice does not violate Reg. B.”
The answer to the question of whether the practice of buying tradelines is legal or not can appear somewhat unclear initially. This can understandably cause many people to hesitate, wondering about not only the legalities, but even the moral implications as well.
Moral, or immoral?
There are a few factors to consider, including laws, regulations, and guidance from credit reporting agencies. We’ll take a look at all of these to explore whether buying tradelines is legal or not.
The internet suggests that it is a well-settled principle that adding authorized user tradelines to your credit report to help boost your score isn’t illegal. You can search for “are tradelines legal” and find many opinions.
We are not giving legal advice, but merely pointing out the consensus on the internet. Even an FTC spokesman Frank Dorman said: “What I’ve gathered from attorneys here is that it is legal, however, the agency is not saying that it is legal technically.”
What are tradelines?
Tradelines are the accounts on your credit report. In recent years the term has also come to mean “adding authorized user accounts to credit reports.” The standing of the tradeline (i.e., whether or not the tradeline has a positive payment history) will determine whether or not it is beneficial to the authorized user.
If you have a low credit score, you can become an authorized user on a revolving account and your credit report will inherit the positive characteristics of that account. If that account is in good standing, with perfect payment history, your credit score could increase.
“Consequently, becoming an authorized user on an old account with a good payment history, may improve an individual’s credit score, potentially increasing access to credit or reducing borrowing costs. As a result, the practice of “piggybacking credit” has developed. In a piggybacking arrangement, an individual pays a fee to be added as an authorized user on an account to “rent” the account’s credit history.”
Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Aﬀairs, Federal Reserve Board, Washington, D.C.
The legal origins of “piggybacking” credit.
First of all, when we refer to “piggybacking credit”, we are referring to the same thing as adding an authorized user, or purchasing seasoned tradelines. It’s all synonymous. In short, this process refers to hitching a ride on someone else’s good credit standing, which as a result can improve your credit score.
The ability to piggyback off of someone’s credit card account came about as the result of the 1974 Equal Credit Opportunity Act.
This implementation of this law gave rise to the unintended consequence of piggybacking credit. Piggybacking works to increase credit scores – that’s why people do it. Because having a good credit score is valuable, people will pay to be added as an authorized user.
What is the Equal Credit Opportunity Act (ECOA)?
The Equal Credit Opportunity Act (ECOA) is a law that was implemented in 1974 to protect individuals from discrimination when applying for loans and other forms of credit lines from financial institutions, credit card companies, and lenders.
Why It Passed
After the feminist movement of the 1960s, women began entering the workforce with more regularity. Credit scoring was in its infancy, and at that time, it was often difficult for women to get approved for lines of credit because of discrimination. Up until then, most women had been denied access to chances to establish credit, and therefore didn’t have the same opportunities as men.
Proponents for the passage of the ECOA argued that women, single or married, were denied loans with more frequency than other applicants. It seemed that lending decisions were still “arguably susceptible to a loan officer’s personal judgments and prejudices,” according to a paper written in 2012 by Dubravka Ritter for the Federal Reserve Bank of Philadelphia.
Initially when the law passed in 1974, it was designed to prevent discrimination against sex or marital status. However, in March of 1976, the law was amended to prohibit discrimination of any kind.
How Does This Apply to Tradelines?
Because the law prevents discrimination, it means that it cannot discriminate who can and cannot become an authorized user on someone’s credit account. The law allows people to piggyback off of a family member’s credit accounts (specifically, spouses) but not everyone has access to a family member with good credit habits. Therefore, if a lender accepts anyone as an authorized user, it has to accept everyone.
Nowadays, the importance of having a healthy credit rating is paramount, for many reasons. The ability to become an authorized user and have your credit score affected in a relatively short amount of time was recognized as extremely valuable. As such, anything that is valuable becomes a commodity, and the tradelines industry was born.
Let’s take one hypothetical example:
“Joe” lost his job and fell behind on some payments.
A few months later, Joe got a new job making 6 figures. His ability to repay a loan obviously increased and his risk of default dramatically decreased.
However, the FICO model, or any model for that matter, does not consider this significant fact. Now Joe is left with poor credit and a 6 figures salary.
Not only is Joe suffering, but so is the economy. A flawed credit system prevented a consumer from purchasing a product.
- The real estate agent loses.
- The loan officer loses.
- The banks lose.
…yet, the credit bureaus and credit scoring companies got their money when Joe’s credit was pulled.
Secondly, the credit bureaus and credit scoring companies are simply one thing… companies. They are private corporations, who stand to financially benefit by judging you. Their job is to appeal to creditors and provide an alleged risk assessment of you. This is supposed to allow creditors to lend at lower risks of default.
Did you notice that I didn’t say that their job was to ensure that your credit file is accurate?
Is buying and selling tradelines to boost credit scores legal or illegal?
Because the practice of piggybacking credit is rooted in the law, few people would cast legal doubt on that process, alone. The commercialization of the practices – primarily to improve credit for profit – is where legal exposure becomes relevant.
This is where the concept starts to cause friction on the opinion-net. People often make good cases for and against the morality of the practice. Of course, the main point is that you are manipulating the credit system.
Are tradelines legal? If not, then everyone is in trouble.
That means the buyer, the tradeline company, the banks, the credit bureaus, and the government are all complicit.
This seemingly sensible contention is the focus of this article. The manipulation argument, as we call it, presupposes that the credit industry is flawless, or even functional, in the first place… in fact, it is a made-up system by a private corporation; it’s not infallible.
More importantly, it is this imperfect system that scores authorized user tradelines in their scoring model and it is the law that allows it. What is left to argue?
A lot of people search Google for piggybacking credit followed by the current year as if the concept has changed. All you have to do is keep up with the regulation that implemented this concept to end this search. When the ECOA changes, then it’s time to re-evaluate whether or not the process still works.
The practice of piggybacking credit by purchasing authorized user tradelines is supported by the law, however…
A tradeline company selling the tradelines could violate the Credit Repair Organization Act (CROA) by demanding upfront fees, for example. However, that doesn’t speak to the legality of the tradeline industry.
If you are looking for legal advice, consult with an attorney.
Ideological positions can certainly change. However, the positive impact that tradelines can have on your credit score is undeniable.
If you are looking to boost your score quickly, you should consider buying tradelines. Here at Superior Tradelines, LLC, we will help determine if you are in a position to benefit from adding seasoned tradelines.
Anything can be abused, so tradelines could be illegal if they were used fraudulently. Being added as an authorized user is perfectly legal. Whether you do crazy stuff like use credit profile numbers… Well, that’s another story. So, speaking of…
CPNs are garbage. Just stop before you begin.
There’s a malignant misconception of an obscure law that has resulted in the misguided belief that you can create a new 9 digit number, like a social security number, for credit reporting purposes. This is a form of fraud called synthetic identities, which the federal government actively and regularly prosecutes.
CPN is an abbreviation for “credit profile number.” A credit profile number is a secondary number used to commit fraud. In reality, a CPN is someone else’s social security number; thus, the use of a CPN is aggravated identity theft.
However, many consumers believe (because that’s what they are told) that CPNs are a viable option for credit enhancement. The pitch goes like this: Leave your bad credit behind; start a new credit file for financial freedom.
CPNs are illegal.
There’s some good news. First, it’s very easy to avoid CPNs. All you have to do is stop working with anyone who suggests you should create a new social security number to avoid the problems with your current social security number.
No matter how bad your credit is, remember two things:
- All credit problems can be solved.
- CPNs solve nothing and expose you to legal consequences.
Seller/broker legal exposure:
There are two types of sellers of tradelines: individual sellers of credit card accounts with positive credit history, and professional tradeline companies. Both are considered credit repair services if the tradelines are being sold for improving credit, and are subject to the many laws and rules that apply.
The first law is the Credit Repair Organization Act (CROA). CROA has a lot of technicalities such as what the agreement between the buyer and the seller has to contain, whether the agreement should exist, rights notifications, notifications of cancellation, and other prohibitions, such as when you can take payment.
Those regulations can create procedural stumbling blocks, so if you’re not hyper-aware you could easily violate them.
The Telemarketing Sales Rule (TSR) is similar to CROA in that it regulates practices of improving a purchaser’s credit rating. But it is more stringent in the fact that it requires you to wait 6 months to get paid if you are selling credit repair services through telemarketing.
There are also state versions of both TSR and CROA, and not all states are the same, so if you’re selling to people in different states it adds a whole other layer of legal complexity.
All those laws and rules apply to vendors and credit repair companies because they see it as a common enterprise between the two. And they would see it under CROA and see it as substantial assistance under TSR.
The underpinning of all regulations for these types of services is really found in the unfairness analysis of the Federal Trade Commision Act. For example, in the “Boost my Score” case, they pled the same facts for a violation of the FTC Act and for CROA.
The FTC definitely is in play and they use it to go after credit repair companies.
Violations of laws:
Misrepresentation is the biggest violation of all of these regulations. Vendors have to make good on their agreements, and if they don’t hold up their end of the bargain, or mislead consumers about what results to expect, they could be in violation.
Under CROA, vendors are in violation if they fail to give a rights statement disclosure, provide a contract, or ensure that the contract meets the requirements of CROA. They could also be fined or prosecuted for charging upfront for the service, or by having the consumer waive any of their rights.
A violation of the TSR would be charging for the service before six months were over if the services were rendered via telemarketing.
The FTC Act protects consumers against unfair or deceptive practices, and monitors and regulates the activities of entities engaged in commerce. Engaging in such practices could likely result in a violation of the FTC Act.
All of these regulations may apply to the credit cardholder, as well.
Buyer legal exposure:
If a company is willing to violate all of those laws they are probably willing to engage in fraud. That means you are also engaged in fraud if you choose to do business with them. If the organization conceals or avoids disclosure about the true nature of what they’re selling, they are taking advantage of the law and possibly crossing into illegal territory.
An example of this would be selling an authorized user tradeline and calling it a primary tradeline. Companies who do this are knowingly capitalizing on people’s ignorance. To understand more, we’ve written quite a bit about why you can’t buy primary tradelines like authorized user tradelines.
If an organization does anything to violate the above-mentioned regulations, they are not a safe option to work with. Even with your best intentions, you could get taken down with them. It is important to protect yourself, as well as not engage in any questionable practices yourself.
Credit agreements are legally binding documents. Any time that you provide personal information to a lender, you are required to be 100% truthful about all the information provided. By furnishing false information to creditors you would be legally liable for the consequences.
Potentially getting involved with crazy things like CPNs could get you in a whole heap of trouble that is simply not worth it. Any time you hear the word CPN mentioned you should stay far, far away. If you’re not convinced, you should read why CPNs are dangerous and illegal.
Legal cases surrounding piggybacking.
In the case of Federal Trade Commission v. RCA Credit Services, LLC, none of the parties nor court found anything wrong with piggybacking. If there was ever an opportunity for a regulator to make a definitive case against the practice of piggybacking credit, it was this one. It included FTC investigators calling RCA and thoroughly vetting the tradeline practice.
The RCA case was the most prominent, tradeline-focused case to date. It was a heavily litigated case. The court docket has 237 entries (over a thousand of pages of pleadings).
Notably, in the FTC complaint against RCA, there was no allegation that the practice of piggybacking credit violated any law or rule. That includes no allegation that the practice violates any provision of the FTC Act, CROA, nor the TSR.
In the “Boost My Score” case, they were found to have been encouraging their clients to misrepresent the nature of the tradeline to the bank. They were also found to have misled consumers about realistic expectations of their services, and charged inordinate amounts for the service.
However, while they were found to be guilty of false advertising, there were no judgments made on the merits of piggybacking in this case.
In the Top Tradelines case, they were convicted of making false claims about what they could actually provide for consumers. The people running this company were outright fraudsters who were practically doing everything illegal under the sun, including lying to consumers, charging upfront fees, and advising consumers to lie to credit bureaus.
Again, the rulings on this case pertained to the actual fraudulent nature of the activity of the corporation. No such charge was made against the practice of piggybacking, or selling authorized user tradelines.
In a 2008 article, USA Today quoted FTC spokesman Frank Donnan as saying, “What I’ve gathered from attorneys here is that it appears to be legal, technically… However, the agency is not saying that it is legal.”
This might sound wishy-washy, and it is, but the FTC cannot declare a practice legal. Otherwise people may engage in illegal practices (such as tradelines on CPNs) and rely on FTC statements for their defense. In fact, the FTC has recently distanced itself from this statement, in the TopTradelines case, stating that “a press statement is not a “final agency action” that could bind the FTC.
The Consumer Finance Protection Bureau (CFPB) conducted a piggybacking study in 2013. One of their hypothetical responses to “concerns about the potential harm from piggybacking” was “to outlaw the practice of piggybacking itself.” This implies the CFPB currently believes the practice of piggybacking is legal.
“Fair Isaac Corp., creator of the well-known FICO credit score, had announced last year it would end the practice…” of piggybacking “…but during Congressional testimony Tuesday, acknowledged it had changed its mind.”
– Jeremy M. Simon, Staff Reporter
“After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user trade lines present on the credit report.”
– Thomas J. Quinn
Vice President of Scoring Solutions, Fair Isaac Corp.
“This is possible because creditors generally have followed a practice of furnishing to credit reporting agencies information about all authorized users, whether or not the authorized user is a spouse, without indicating which authorized users are spouses and which are not. This practice does not violate Reg. B.”
– Robert B. Avery, Kenneth P. Brevoort, and Glenn B. Canner
Divisions of Research & Statistics and Monetary Aﬀairs
Federal Reserve Board, Washington, D.C.
Which way is the wind blowing?
Since 1974 until the present, it has been common knowledge that the practice of buying and selling tradelines is a legal one. However, for the first time in 45 years, the FTC has indicated that it may change its position on the practice. No law has changed, nor have any judges ruled. However, the FTC has – in two cases – slipped in arguments that appear to question the legality of the practice.
Their argument is: If the authorized user does not have access to the card (which is a piggybacking arrangement, it does not), then it’s not really an authorized user. That means untrue information is being reported to the credit bureaus. Reporting untrue information or causing untrue information to be reported to the credit bureaus is a violation of the CROA.
In 2019, the FTC first asserted this argument in the TopTradelines case.
In 2020, the FTC made the exact same argument in the BoostMyScore case.
We’re unsure where the FTC is going with this argument. Becoming an authorized user is, in fact, an authorized user whether the authorized user has access to the card or not (not to mention equal opportunity considerations). Nevertheless, we wanted to add the “which way is the wind blowing” just in case this FTC position materializes into something more definitive.
The FTC just filed another lawsuit against a company with a laundry list of questionable behavior having nothing to do with tradelines. However, the FTC asserted this argument again, for the third time.
This needs litigated and decided.
Avoiding legal issues:
The best way to avoid any legal issues is to work with an experienced, reputable tradeline company. Remember that the onus is also on you to do the right thing, and that you could be complicit for the fraudulent activity of an organization you are associated with.
We review extensive tips on how to avoid getting scammed, and how to find the right tradeline company for you.
One of the best ways to protect yourself is to use an escrow platform, such as Credzu. Using an escrow platform is a great way to make sure your money is secure until the transaction is complete.
We’ve been in business for over ten years. We know the ins and outs industry, and we’re here to help you make the right decision that will benefit you the most. Just comment below or call us with any questions.
Frequently Asked Questions
1.) Have any companies been sued directly for piggybacking credit?
The answer is no, but tradeline companies have been sued for doing things that violate the CROA, TSR, and FTC Act.
2.) Have any consumers been sued for piggybacking credit?
Again, no. Consumers have been sued for synthetic identity fraud that used piggybacking to enhance their false identities. But they weren’t sued directly for piggybacking.
3.) Will an authorized user’s credit behavior (good or bad) affect the primary account holder’s credit report and score?
No. It is a mischaracterization to believe that you’re taking information, putting it in a bag and shaking it to mix it all together. Accurately, what is happening is this: The primary account holder adds the authorized user at the bank. The bank reports information about that account to the credit bureaus. Nothing from the authorized user is being reported. Only information from the primary account holder (for only that specific account) is being reported. It’s a one-way street.
4.) If an authorized user’s credit has some collections or judgments on their report, would tradelines still boost their score?
Yes, your score will go up, but… from what to what? Right? If you had a 700 and a collection or judgment brought it down to 500 and the tradeline brought it up to 575, that’s amazing, right? 75 point boost? Well, even so, you can’t get approved at 575 (for anything that I know of). So, it’s best to do a measured approach between credit repair (or debt settlement) and tradelines.
5.) Is bankruptcy a good option?
It’s such a good question and the answer depends on a lot of things. For example, you probably wouldn’t want to invoke the power of bankruptcy for a $5,000.00 charged off a credit card. You’d want to reserve that extraordinary right massive debt for which you are unlikely to recover (like failed businesses, significantly upside-down mortgage, etc.).
6.) What would happen if the primary user ended up defaulting, say through some major change in life circumstances? Would the authorized user then become equally liable for the credit card debts?
An authorized user is never responsible for the debt on the primary account. A primary account holder could mess up his or her account and negatively affect the authorized user’s credit score and if that happened, the authorized user can dispute the account off his or her credit report.
Now, in a non-business relationship (friends, family, etc.), there is more of a risk of that happening, but with us, the primary account holder is paid handsomely to keep their account in good standing.
5.) Is it safe to buy tradelines?
If you are buying from a knowledgeable, reputable source, such as Superior Tradelines, then yes.
37 thoughts on “Are tradelines legal or illegal? Moral or immoral?”
This is the biggest scam I have ever heard of. What happens when the person you add to your user history defaults on their card or has further missed payments or financial problems won’t it effect the person with good credit who added him. And If that person you added takes out a car loan and defaults won’t the debt buyer or car agency sue that person for fraud and try to go after the person with good credit. This whole thing is a nightmare waiting to happen.
Darrin, I am not sure too many people would take you seriously, after insulting us so aggressively and ignorantly (I don’t mean that in a rude, colloquial way, but in the true sense of the word: “lacking knowledge or awareness in general…”). I won’t judge you, though. Maybe you were ripped off by some company and you’re taking your frustration out publically. I don’t claim to know anything about you, which is a good way to be in life.
Just so we’re on the same page, “scam” means “a fraudulent or deceptive act or operation.” Fraud is a crime. So, I am not quit sure how you came to your incorrect conclusion, especially with all of the unanswered questions you posed; that is, without knowledge. Also, I don’t mind your misunderstanding, but when you make public declarations that someone is breaking the law (when they’re not), that’s called defamation. So, a little bit of caution and respect is probably appropriate, here. I certainly would not walk into your store and call you names or suggest that you’re breaking the law.
Nevertheless, I’d be happy to answer your questions.
1) Will an authorized user’s credit behavior (good or bad) affect the primary account holder’s credit report and score? No. It is a mischaracterization to believe that you’re taking information, putting it in a bag and shaking it to mix it all together. Accurately, what is happening is this: The primary account holder adds the authorized user at the bank. The bank reports information about that account to the credit bureaus. Nothing from the authorized user is being report. Only information from the primary account holder (for only that specific account) is being reported. Its a one-way street.
2) Is a primary account holder liable for the future acts of an authorized user? No. Why would they be? Suppose a person with no credit applies for a credit card. They get approved. Because of that approval, they now have a credit score. They pay on time. They build up their credit score. Pull out an auto loan and default. Is the initial credit card company liable? The credit bureaus? Your question is misguided. The person who defaults is liable. The purpose of increasing credit scores is not to default; that’s a horrible outlook on life, which should be condemned.
The idea that the process of authorized user tradelines is a “nightmare waiting to happen” can apply to anything. Bleach is a well respected cleaning product, but a “nightmare waiting to happen” if a child drinks it. Cars have revolutionized the western world, but are “nightmare[s] waiting to happen” when they’re used to mow down people in Europe. So, sure… I agree with you. If you abuse authorized user tradelines, they are, indeed, nightmares waiting to happen. Since we don’t, they’re not as far as we are concerned.
With all of that aside, Darrin, you’re probably on our site because you’re researching credit related issues. Since we have more pages of information than all other tradeline companies combined, you see that we take client concerns seriously and answer their questions. In that regard, if you have any questions about your credit situation, we consult you for free and perform credit report analysis for free. By all means, take us up on that…
Wow. Such valid and informative response. Great Information by the way.
This is absolutely credit deception that lends itself to credit fraud.
An authorized user is an actual shared user of a credit card account. It’s a real financial relationship. Strangers selling their financial data to strangers to falsely boost their score is credit fraud. A 500-score individual that purchases someone else’s credit history to make themselves appear to be a 700-score individual is credit fraud. When the fake 700-score uses their fake credit profile to further obtain credit, the bank is underwriting a false credit score and false credit profile when determining if they should issue credit. Therein lies the undermining and fraud.
You’re partly correct and partly incorrect.
There was a shift from authorized users to credit profile numbers.
First of all, the law permits authorized users under the equal opportunity credit act. If it were limited to only those within a family, it wouldn’t be very equal, would it?
If your score increases as a result of being an authorized user, that is a real (not a fake) credit score. The system is designed to accept this designation and resulting effects.
Someone with a 500 credit score could not boost their credit score to 700 with authorized user accounts. That’s just simply impossible, so the hypothetical attached to it is not worth addressing.
You are 100% correct that if you’re using a fake credit report (i.e., a fake social security number), that is 100% fraud. However, the banks are under no illusion of the nature of an authorized user, because it specifically says “authorized user” right on the account. In some situations, underwriters will disregard the account entirely. There are situations, unlike what you’re saying, where even federal loan agencies practice underwriting procedures that allow the authorized user if it represents the borrower’s creditworthiness.
For fraud to occur, a bank must be tricked. The designation of “AU” undermines your entire argument.
I AGREE. SCAM
The world needs more positivity 🙂
If you’d like to elaborate on your opinion, I’d be happy to discuss it with you. I have helped about 30,000 people since we started in 2010. I’d be happy to do the same for you.
Also the person receiving the trade line as an authorized user on a credit card is just receiving the benefit of the individual authorizing them as a user. The authorized individual doesn’t actually get a credit card or access to the sellers credit line, they just benefit from the good pay history, credit account age, and the credit amount from the original credit holder. It would be dumb to authorize a stranger and give a stranger an actual credit card in their name from your account. The buyer of the trade line never actually has access to purchase anything. Nothing that the authorized user does such as missed payments on their credit accounts will ever show up on the original account of the individual that made you an authorized user. His good credit accounts that he authorized you as a user shows up on your account but your bad irresponsible credit use will never appear on his credit report because he’s authorizing you, you are not authorizing him to use your credit. Get it??
Thanks for the great feedback!
Help me dang!
Sure, you can get started here. We look forward to it!
If an authorized user’s credit has some collections or judgements etc… would tradelines still boost their score,and if so how long is recommended to remain an authorized user ?
Yes, your score will go up, but… from what to what? Right? If you had a 700 and a collection or judgment brought it down to 500 and the tradeline brought it up to 575, that’s amazing, right? 75 point boost? Well, even so, you can’t get approved at 575 (for anything that I know of). So, it’s best to do a measured approach between credit repair (or debt settlement) and tradelines. https://superiortradelines.com/start/ to find out more.
So i just have one question, is it necessary for the person or persons looking to reboot their credit and get up from under some debt. Is bankruptcy a good option. From what I know bankruptcy is a weapon that once used takes a long time to recover. Why is it some folks think good company credit is exclusive and you can have good personal credit as well. So overall my question is, is bankruptcy the way to go?
It’s such a good question and the answer depends on a lot of things. For example, you probably wouldn’t want to invoke the power of bankruptcy for a $5,000.00 charged off credit card. You’d want to reserve that extraordinary right massive debt for which you are unlikely to recover (like failed businesses, significantly upsidedown mortgage, etc.).
Here’s a tip, though: Do what you started with; a goal. Say “I want X, how do I get there?” rather than “Will Y get me to X?” because you should focus on your goal, rather than wasting time ruling out the things that won’t work. You should ask experts to solve your problems, rather than asking experts to approve or deny the solutions you’ve discovered. Then, ask 5 more until you hear good ideas.
But, since you asked specifically about bankruptcy and tradelines, I wanted to point you to here, here and here.
What would happen if the original good credit person ended up defaulting, say through some major change in life circumstances? Would the second person (the non-using tradeline recipient) then become equally liable for the credit card debts?
Great question. The answer to your specific question is “no,” but I’d like to go a bit further than that. First of all, the authorized user is NOT liable for the debt. In fact, take the opposite scenario, suppose an authorized user racked up debt (assuming he or she had the card to do that), the primary account holder would be liable for the debt and the authorized user would not be liable for the debt. So, the risk you mentioned actually applies in reverse. The primary user is at risk of an authorized user’s behavior (which is why the authorized user does not actually get the card, here).
However, that’s not the end of the story. The purpose of adding an authorized user for credit purposes is to make the history of the account to report to the authorized user’s credit report and, therefore, impact the authorized user’s credit score. So, if the primary card has high limit, low balance and perfect payment history, the authorized user’s credit report and score will be positively impacts. I think this is what you were trying to ask: What if the primary account turned negative, such as missed payments, maxed out account, etc.? I think you were asking whether the authorized user’s credit would be negatively affected, and the answer is “yes.”
Now, I suppose the risk exists in a non-business relationship (friends, family, etc.), but with us, the primary account holder is paid handsomely to keep their account in good standing.
Let’s suppose, wildly, that a wealthy card holder – who has a history of getting paid to keep his or her account in good standing – somehow missed a payment. The good news for the authorized user is that it is very easy to dispute off your credit report an authorized user account. The primary account cannot dispute it off, because it is, indeed, his or her account.
So, to recap: 1) An authorized user is never responsible for the debt on the primary account 2) A primary account holder could mess up his or her account and negatively affect the authorized user’s credit score and 3) if that happened, the authorized user can dispute the account off his or her credit report.
Hope that helps!
Are you hiring if so can an employee work remotely from home? I have worked in the financial services industry for over 20 years. I have been in the commercial collection industry since 2007 and am very interested in pursuing a career in this arena of financial services.
Yes. Please send your resume to email@example.com
Hello , I was able to raise my credit scores increased excellently through the help of some people i was recommended to, contact them if you require any credit repair issue, firstname.lastname@example.org their services are fast and legit. you will be grateful
GREAT BLOG 100% guaranted to post on credit report!! Seasoned accounts no missed payments high limit. Money back guaranteed to post*! Website coming soon!!
Alright, look forward to it!
i interested in employment opportunities and the services you represent to improve my personal credit scores.
Barry, shoot us an email to kate@superiortradelines and email@example.com
Send a resume or a write up about your experience or interest in the industry.
Please include your contact information.
Also, tell us why you think you’d fit with us or this industry.
Look forward to speaking with you.
what happens to the authorized user credit score once the union has ended between primary and authorized user accounts?
We just wrote a blog which you can read if you click here about what happens to credit scores after the authorized user tradelines.
Although you can see that scores drop, there’s also more to it. It depends on what you mean by “once the union has ended.” If you are completely removed (and the authorized user tradelines disappears from your credit report), the blog post referenced above has your answer. However, if you merely remove the authorized user at the bank (and you do not remove the authorized user account from the credit bureaus), the impact of the tradeline will remain and slowly diminish over time. To learn more about that, click here and watch the view titled “How long do tradelines last?”
I hope that was helpful.
My wife and I are the the market for a house. We have done everything to get her credit up to par but it seems as the her credit score won’t get any hire. Would obtaining a Tradeline help with a boost that we so need? Also how can we verify we are using a legitimate source to get a trade line?
Thanks for reaching out to us!
It is certainly possible that adding tradelines could enhance your wife’s credit scores. The only way to find out would be if I could review a recent copy of her credit reports to determine what factors would achieve enhancement. You mentioned that you’re working on her credit but the numbers just won’t go up any farther. I’d like to try and pinpoint the exact reason and figure out if we can assist.
As for legitimacy, we have a great article about what to look for in a tradeline company:
I’d love to be able to help you out in achieving your credit goals. If you would like to discuss this in greater detail feel free to email me at firstname.lastname@example.org, or call me at 321-799-6155.
Thanks in advance!
How long does a Tradelines stay on your credit report
Hey Jim, we wrote a block post about this specifically: https://superiortradelines.com/facts/how-long-do-tradelines-take/
Check that out and let us know if you have any other questions about tradelines.
Jim, I’m sorry, here’s the correct link: https://superiortradelines.com/facts/how-long-do-tradelines-stay-on-credit-reports/
Why as primary holders , do we get the authorized users mail ( those that have been added) . Such items as their credit card applications, parking violations for cities , credit reports etc. So much mail us received on these people. Why is that ?
What will a score of 850, pay history 100%, utilization is 2% of $42,000.00, and age is 7.5 years old, with 6 acts and 0 derogatory marks… do for a credit score of someone with 523? If I added them.
No idea. Although you were detailed, there’s still too much detail missing. Also, just so you know, you’re 850 credit score is not a relevant factor; you’re not actually transferring score points to the authorized user. The most relevant factor is what’s in the authorized user’s credit report; i.e., why is there credit score a 523. Is it a lack of credit? Is it too many negative items? Undoubtedly, their score would increase, but why they’re a 523 would tell you how much their score would increase. If they have relatively no credit history, you will see tremendous gains in score. If they have a lot of negatives, you will see a slight (and maybe insignificant) increase in score.