Adding strangers as authorized users on your credit cards can help them boost their FICO scores–or enable fraudsters.
By Brandon Kochkodin, Forbes Staff
When a woman who once bore the title “Financial Applications Product Owner II” at an insurance company, starts a TikTok with “this is the sketchiest thing I’m doing to make extra money,” you might think she’s playing it up for drama. But Amber Smith, a 27-year-old from Des Moines, Iowa with an MBA, is dead serious. She’s swapped insurance for the influencer business (focusing her content on reselling clothes), and she’s been picking up $40 here and there with a scheme that sounds pretty shady.
“I’ve started selling tradelines on my credit cards,” Smith says in the video that has since garnered millions of views across the social mediasphere. “Essentially what this is, is if a person has bad credit, but they know that they need to get a mortgage or a car loan or something, they pay money to this website,” she says, referring to Tradeline Supply Company, a San Diego based broker. “This website matches them up with me based on what they’re looking for and I add them as an authorized user to my credit card.”
A tradeline, for the uninitiated, is what the credit bureaus (Equifax, Experian and TransUnion) call each credit card account listed on an individual’s credit history report. Algorithms turn the information in credit reports into a credit score–most often a FICO score ranging from 300 to 850.
Incredibly, individuals like Smith with strong credit histories, can make money by adding total strangers as authorized users on their credit cards. These buyers don’t actually gain access to the card; instead, they get a tradeline, paying for the benefit of the card’s favorable characteristics—its long account history, high credit limits and impeccable on-time payment record—to appear on their own credit reports. The richer the card’s history and the larger its credit line, the higher the fee it commands. After a few months, the seller removes the buyer from the card and opens up the spot for the next customer to piggyback off their sterling credit profile.
CREDIT PHANTOMS
One in five Americans have such thin credit histories that they are considered invisible or unscorable. Another fifth have low or “subprime” scores.
On Tradeline Supply’s website recently a three-year-old Capital One card with a $5,000 limit was listed at $322. Meanwhile, a 19-year-old Chase card with a $69,700 limit was priced at $1,955–almost as much as the average American household spends on housing each month.
There appears to be quite a big mark-up involved. Social influencer Smith says she earned $40 from a sale that Tradeline Supply priced at $275. Darren Iba, Tradeline Supply’s chief operations officer, wouldn’t discuss the company’s revenue or mark-ups, but did take pains to point out that the company isn’t promising buyers results. “Many consumers make the mistake of thinking that tradelines arbitrarily boost credit scores, however, this is not necessarily true,” he says. (Two other tradeline selling sites, competitors Boost Credit 101 and Superior Tradelines, didn’t respond to requests for comment.)
Despite Iba’s disclaimer, tradeline buyers obviously believe it’s a quick and effective way to hack their credit scores, getting a temporary boost that might qualify them for credit lines and loans–or for lower rates–than they could get otherwise. And there’s some evidence it can work.
There are also plenty of critics. “I don’t think this is a good idea for buyers or sellers,” says Beverly Harzog, a credit card expert and the host of the “Your Personal Economy” podcast. “It’s not technically illegal, but whenever you have to say that something isn’t technically illegal, there’s something else wrong with it. There’s a lot of risk involved, you could break the terms and conditions of your credit card, you could be helping someone commit fraud.”
For sellers, the main risk is getting their card canceled if the issuer catches wind of the tradeline selling. Then there’s the slim chance, albeit a scary one, that a buyer might finagle their way into actually charging purchases on the account, even without a physical card. They could, in theory, pull some tricks using the details that pop up on their credit report. Online chatter suggests it’s unlikely, but Smith admits you probably wouldn’t hear someone confess they got duped like that. Plus, as Harzog points out, by selling tradelines, sellers might unwittingly be giving a leg up to fraudsters.
A blog post on Experian’s site suggests tradeline buyers could be at risk of becoming victims of identity theft if the personal information (including Social Security number) they provide to get added as an authorized user is misused. The post also raises the specter that a tradeline buyer applying for a loan or credit card with an artificially boosted score could be in danger “of committing bank fraud,” by falsely representing their creditworthiness to lenders.
There’s also the matter of out and out fraud. Back in 2013, the FBI busted a huge credit card fraud ring, arresting 13 people across four states as part of a $200 million scam, one of the largest of its kind at the time. The crooks used authorized user tradelines to pump up the credit limits on credit cards tied to fake IDs, then went on a shopping spree, splurging on fancy cars, designer clothes, electronics, and gold. Agents even found a stash of $70,000 in cash in one suspect’s oven. They tracked down about $60 million sent off to places like Pakistan, India, and the United Arab Emirates. Fast forward to 2016, and 19 people had pleaded guilty to being part of this massive con that grew to involve 7,000 fake identities and tens of thousands of credit cards, according to prosecutors. This scheme took place before Tradeline Supply or TikTok even existed–the FBI says the fraudsters bought their tradelines on “a network of black-market businesses called `tradelines’ providers.”
So tradeline selling isn’t new, even if it’s gotten a fresh boost from social media and out-in-the-open web sites. “It emerged about 20 years ago, but back then it was branded as ‘piggybacking,’’ says Rod Griffin, director of public education and advocacy at Experian. “In response, many credit card providers implemented policies about who and how many people you can add as authorized users,’’ he adds.
Those restrictions haven’t killed the tradeline market. “At Thanksgiving, I’ll tell people about this, and they’ll be like whaaaaat? But it’s relatively common,’’ says Naftali Harris, the co-founder and CEO of San Francisco based SentiLink, a fraud prevention company used by 10 of America’s 15 biggest banks. “I would say of [credit] applications that we see, about one out of a thousand appear to be a buyer or a seller. Fraud is an uncommon thing in general, 98 or 99% of the applications we see are completely fine. So one out of a thousand is relatively common.”
Weeding out individuals who have embellished their credit histories by buying tradelines is challenging due in large part to the Federal Reserve’s Regulation B and the Equal Credit Opportunity Act (ECOA) of 1974, which prohibits discrimination based on race, gender, marital status, age, religion, national origin, or public assistance status. Before the law, banks often required a woman to get a male co-signer to get a loan or credit card and married women could fall into a pernicious credit history trap. A happy couple would share a credit card in the man’s name, with the wife listed as an “authorized user.” Even if she paid some or all of the monthly credit card bill, the bank would report the payments in the husband’s name only. Then, if the woman became divorced or widowed, she would be left without a credit history or borrowing power.
So in Regulation B implementing the act, the Fed required that lenders attribute payments to both the cardholder and the authorized user spouse in reports to the credit bureaus. In addition, when analyzing a person’s credit worthiness, lenders had to consider the history of any account in which the person was an authorized user spouse. But–and this is key–Regulation B didn’t require banks to figure out which authorized users were spouses and which weren’t. Instead, if they wanted, they could simply give all authorized users the same treatment mandated for a spouse.
No, influencer Smith didn’t discover this reading Regulation B. Instead, she stumbled upon the tradeline idea while browsing Mr. Money Mustache, a popular FIRE (financial independence, retire early) website that champions “financial freedom through badassity.” Selling tradelines has become such a common side hustle within the FIRE community that Tradeline Supply even promotes it as “the perfect complement to a FIRE lifestyle.”
“I’ve gone to FIRE movement meetings. A couple people there had been selling tradelines for years,” Smith says. “I was able to ask them if they had issues like if their cards got shut down. So that gave me the confidence that this would work. It’s still a little sketchy, but to make $40 dollars for 15 minutes of work, to me, that seems worth it especially since you can give someone without good credit a chance. I got a comment from someone who went through a bad divorce who told me buying tradelines helped her reestablish her credit.”
The concept of tradelines may be resonating beyond FIRE circles. Take the song “Tradeline” by Ray Vaughn, a rapper under the label Top Dawg Entertainment (it once included Kendrick Lamar), that’s featured on the NBA 2K24 video game soundtrack. In his lyrics, Vaughn plays with the idea: “tradelines we finally up the score / ha ha / got to get a check / like I’m out here burning / got to get the earnings.” (A request sent to Vaughn through his record label for clarification of his lyrics’ meaning wasn’t answered.)
Maybe Vaughn’s song helps explain why Smith’s video attracted the attention it did. Buying and selling tradelines is subversive and treads a murky line—it’s apparently not illegal, yet it’s also not what some people would consider ethical. On its website, Tradeline Supply Company sidesteps any legal issues by stating that it “does not give legal advice and cannot definitively state what is legal and what is not.”
But in a blog post, Tradeline defends the ethics of the practice–on the grounds that people manipulate their credit scores all the time. For example, the post notes, parents might put their 18-year-old on their oldest cards as an authorized user to help their kid build a credit record. Iba offers an equality spin to the argument. Most of those who have authorized users on their cards are “the higher income demographic, ” he says. “We believe that we are selling a right that everyone should have access to since our American culture has evolved to use this strategy as one way to establish credit or build credit.”
Not surprisingly, credit card companies aren’t keen to talk about this issue. Discover, American Express, Capital One, and Chase didn’t respond to requests for comment.
Like credit bureau Experian, credit scoring leader FICO questions the wisdom of tradeline buying. “In general, individuals should be careful and think twice before they pay to be added to another person’s credit card account as an authorized user,” a FICO spokesperson said in an email. “When done, the information on that credit card account will be reported on your credit reports as well. It could result in an increase, decrease or have no impact on your credit score – it depends on the information reported on the authorized user account in addition to the other information found in your credit report. This action is not without risk. For example, if the card holder charges a lot on the card that increases the balance, that high balance information will populate on your credit report when the account is updated which could cause the score to decrease.”
Translation: There’s no guarantee you’re buying a credit score boost, and you could even unwittingly be dinging your score.
But if tradelines weren’t effective in boosting FICO scores, why would people with poor credit or limited credit histories, who probably aren’t rolling in cash, still invest hundreds to thousands of dollars in them? “There’s a bump; if you get added to a card with twenty years of perfect payment history, you’ll get a bump,” says SentiLink’s Harris.
Experian’s Griffin cautions that, at best, buying a tradeline is a temporary solution to a long-term issue. “The impact of an authorized user account is limited and it’s going to be negated by maxed out cards, late payments, or delinquencies. The only real way to improve your score is to catch up on your debts, otherwise you’re spending your hard earned money that, frankly, you already owe to other people, on something that might not work.”
Plus, a tradeline buyer might be turned down by a diligent lender, warned one mortgage broker who commented on X about Amber Smith’s viral tradeline video. Wrote KareemBaldwin1: “Authorized user accounts are being looked at differently with mortgages now. They want a letter to determine the relationship between you and the authorized user and the billing statement. Saying you bought a tradeline will definitely get your loan denied.”
Experian’s Griffin suggests that there’s a bigger problem with this credit hack that affects all borrowers–and not just those who buy their way to unearned higher scores. “The macro issue is that when these people take on more debt, lenders inevitably take on more losses,” he says. “It increases the cost of services for everyone else. Those losses get passed on to everyone else. That’s what the credit reporting system is meant to address.”
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