[Credit Repair] Cease Promoting Tradelines
Tradelines. Let me say that again. Tradelines. If you don’t get a chill, you still can’t afford to miss this episode. This incredibly scary and dangerous practice is infiltrating our industry and has enormous consequences. Hundreds of thousands of people face life changing consequences, and as a loan hero, you need to know the truth so you can educate and protect your business and your customers. In this episode, I’ll show you buying tradelines for what they really are and why you should never use them, and why they are one of the scariest things in the credit repair industry. So stay here.
So the big question is this. How can we turn our passion for helping people with their credit into a successful business without borrowing, without spending a fortune, by pulling it out of nowhere so that we can help most people and still be highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen and welcome to Credit Repair Business Secrets.
If you’re not already scared of tradelines, they’ll haunt you by the end of this episode. The nasty giant banks and credit card companies always wanted their cardholders to use the credit cards they issued as much as possible for one reason – to take as much money as possible by charging you interest and fees. So your dream client is the person who is always drowning in eternal debt. Because of this, they often give a two-for-one option so that the primary cardholder can open authorized user accounts. Now these should be limited to family members and close friends. Because whoever the account holder allows to be on the card, that person can use the entire line of credit, so the responsibility for paying off the debt rests on the shoulders of the primary account holder. That is why this is important. When these authorized account holders realized they had inherited all those years of positive on-time payments and their scores were receiving a hefty boost, it became a huge sensation known as piggybacking. And suddenly a whole niche was born in the credit repair industry. But as with any loophole, people will always find ways to exploit it. And boy do they ever have. Entrepreneurs began to build entire networks of people willing to rent out user spots on their credit cards. And they would rent them out to complete strangers as authorized users. And they charged a huge fee for it, okay, some credit card companies still allow up to 50 authorized users on a single card. And all of these authorized users get a big surge in their score quickly as the scoring models would be tricked into calculating any aged positive credits that belong to the master account holder. You know, and it would attribute that to the authorized user. If the account had an account balance and a low limit, it could piggyback or reduce its load drastically, which would add even more to the score. Remember that was a year ago. Okay, that used to be good. But listen to me when I say these times, they have changed okay. A few years ago, banks and lenders noticed this. Technically unqualified buyers would suddenly be qualified for larger purchases for which they would otherwise not have been approved. And as you can imagine, that meant they were seeing an unusually high number of defaulted loans. Because of this, it turned into an unfair advantage, and the credit rating companies like FIFO and the others made changes to the creditworthiness impact of authorized user accounts. Once these changes occurred, this should have put all of these Tradeline brokers out of business, but many are still active today. So here’s what you need to know: Any credit repair company or broker that still sells tradelines is taking a huge risk and operating illegally and unethically. The fact is that not only is buying tradelines no longer effective, it can also land you in jail. Most lenders now consider it fraudulent to apply if your credit report lists accounts that do not belong to you, and in many cases mortgage lenders consider it a mortgage fraud. Okay, they are considering using this mortgage scam and that is a federal offense. Okay, people go to jail for federal offenses. However, there are ethical and valid ways to help your customers. And that’s called piggyback. Now there is a huge difference between buying a spot on a stranger’s credit card and piggybacking on a family member or spouse’s credit card. Okay, buying your way on a stranger’s credit card so that you can qualify on your own can be viewed as a scam. But if your immediate family member or spouse adds you, it won’t. It’s also important to know that buying a Tradeline from a company or a stranger not only puts you in jail for legal consequences or even fraud, but it also doesn’t help you realize the changes they didn’t make longer the possibility of inheriting the payment history or reducing your occupancy. But if your immediate family member or spouse adds you, then they do too. Here are some tips to keep in mind. If you are planning to piggyback your spouse or immediate family member, some banks, lenders, and institutions may automatically remove all authorized user accounts from you or your client’s credit report at the time of application. And they do this because they want to see your true score based on your true account history without the authorized user account. Okay, the only way to ensure that the account your customer is piggybacking on is actually being considered is for them to become a joint account holder. Okay authorized users, they are not responsible for payment. Okay, if the primary user on the account fails to pay their bill, the authorized user can simply request that the account be removed from their credit report along with the missed account, payments or other negative information that may have occurred. While on the other side of the joint account holder they have the same responsibility of repaying the money, okay, repaying money borrowed, okay? And they cannot be removed from the card, they are permanently obliged to pay. Even if the primary cardholder files for bankruptcy and you are the joint account holder, you can still be held accountable. This is why it is very important that you only do this with people who you really know and whom you trust. If you want to keep yourself and your customers out of jail for fraud and get ethical and legal results, stay away from Tradeline traders, okay? It’s just not worth it. People go to jail. Instead, teach your customers how to piggyback a family member’s card or their spouse’s card as an authorized user or joint account holder. OK? It will help and not harm their life or credit. Okay, one of the really good guys in our industry is Jose Rodriguez. OK. And Jose, he started his credit repair journey trying to get his finances back in order after we left the Marine Corps, okay? After we left the Marines and he started learning about loans, he helped his family and friends fix their loans, and now Jose runs a multi-million dollar loan repair company that he runs from home . Now, at our past Credit Repair Expo, I asked Jose about the practice of buying and selling tradelines. And he told me that. He said, “If you are considering buying tradelines for your clients, you have to ask yourself: is it ethical, legal and moral?” In Jose’s opinion, tradelines are a thing of the past. And they’re a gray area in business ethics. If our millionaires don’t need them and they run seven-figure businesses, you don’t need them either. And if you’re thinking of starting or starting a credit repair company but aren’t sure what to and can’t do, how about I give you hyper-focused attention and hold you by the hand while you are in just a few weeks Starting and Scaling Your Own Credit Repair Business? Would you like that? Then I would invite you to take part in the next Credit Hero Challenge as it starts in just a few days. And if you find value in the things I share on this podcast, click below to sign up, okay? I don’t want you to miss any episodes. And if you’re feeling nice, rate me and give me a review because this is a new podcast and I can use any help I can get. And if you have a comment or question, leave it below and I’ll answer it. And see you in the next episode. So change your life until then!
Want to find a quick way to build an amazing business that will help people, change lives, and make a good living in the process? Then I’d like to invite you to my free online training at creditrepaircloud.com/freetraining. In this free training, you will learn how to get customers to be ready to pay you even if you are just starting out to get simple credit repair results without being an expert and how to get all of the customers you will ever need without paying for advertising. This training is also absolutely free. Just visit creditrepaircloud.com/freetraining.