People can suffer from poor credit score due to various reasons. But today you can increase your credit score immediately by paying an Internet-based business, a very high fee. However the question arises: are these companies for real or just plain scams?
Though some cases have been successful, there are lot more unsuccessful instances than successful ones. The tactics that were used in successful cases was to authorize the person with poor credit score to sign on various credit card accounts on behalf of somebody else who had an excellent credit score. As a result, the person with poor rating got an excellent credit rating, and consequently higher credit score.
The financial industry has made a noise about this loophole in the credit reporting system. Although it does not make sense that a person with a perfect credit score would harm their reputation by letting a stranger “piggyback” on their credit scores, it occurs and the financial industry is incorporating changes to apprise of this tactic and NOT have it show up on another person’s credit score. This procedure is commonly used by parents to achieve a credit rating set up for their college-going children. However there have been instances of abuse of this method and the credit industry is aiming to stop it as soon as possible.
This procedure gives the person with poor credit, a jump of over 150 points that was more than enough to get them approved for any great loan offer. The person holding the credit card accounts is paid $100-$150 per account, and the Internet based company keeps the remainder as profit. The person with poor score does not know the account numbers given to him, so he cannot use them, but just the credit history of the actual owner.
If you have been considering about using this method yourself, be very alert about what you are up to and the likely outcome of the step. Although it is not illegal presently, changes are being made in the credit reporting system that would detect this method of artificially increasing someone’s credit score. As a matter of fact, some mortgage companies are considering reverting to old mortgages that have used this technique and re-qualify the mortgage owner with their actual credit score. Discussions are also on about asking the people listed as authorized signers on other accounts to tell the relationship amongst them. There should be set minimum and relationship standards E.g. a son/daughter relationship with parents is ok, but if the relationship cannot be proved, then the credit rise will be rejected.
There are better methods, completely legal, to boost your credit rating, and these are much more permanent. If you want to improve your credit score, you have to follow some procedures before applying for a loan and dealing with these things up front will save you a lot of interest.