Are Credit Sweeps Legal? – Credit Countdown

December 11, 2021CreditBy toptierfinancial

Credit sweeps are a heavily advertised and promoted service among credit repair companies. Unfortunately for many unsuspecting consumers looking to improve their credit, the credit sweep is a fraudulent and illegal practice.

John Ulzheimer, one of the nation’s most prominent credit experts, explains why you need to watch out for credit sweep scams in an episode of Credit Countdown.

Disclaimer: The views and opinions expressed in this article are strictly those of John Ulzheimer and do not necessarily reflect the official stance or position of Tradeline Supply Company, LLC. Tradeline Supply Company, LLC does not sell tradelines to increase credit scores and does not guarantee any score improvements. Tradelines can in some cases cause credit scores to go down.

Credit Repair: Legal vs. Illegal

To be clear, credit repair as a whole is not illegal. Credit repair—the legal kind at least—is simply the process of removing inaccurate or unverifiable information from a consumer’s credit report. This is done by disputing the negative items with the credit reporting agencies (CRAs, AKA credit bureaus). Alternatively, credit report information may be challenged through the financial institution that is furnishing the data to the CRAs.

Credit repair is legal as long as it complies with federal and state rules and laws that govern the industry of credit repair.

Hiring a Credit Repair Company to Fix Your Credit

Although the credit dispute process is free to everyone, consumers who want help repairing their credit can choose to pay a credit repair company to try to get negative information removed from their credit reports.

Although trustworthy credit repair professionals do exist, there are also plenty of “scumbags,” in John’s words, in the industry who take advantage of consumers and use illegal and fraudulent practices to make money.

For this reason, it’s extremely important to do your due diligence before deciding to work with a credit repair company.

The Credit Dispute Process

Typically, the credit repair process involves sending letters on the behalf of consumers to challenge the validity of the data in question and ask the CRAs to validate the items. This process is not illegal; it is commonly used and has been around for decades.

Disputes Under the Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) gives you the right to dispute information on your credit reports that you believe to be incorrect. If you do challenge an item on your credit report, the credit bureaus are required to perform an investigation. They then look into your claim and determine if the dispute is valid or if the challenged information can be verified as correct.

Section 605B of the FCRA

Section 605B of the FCRA is a section that is entitled “Block of Information Resulting From Identity Theft.”

This section of the FCRA states that if you have been the victim of identity theft and someone else has fraudulently opened accounts in your name, then you have the right to have the fraudulent information resulting from identity theft removed from your credit reports.

In addition, in the event of identity theft, Section 605B obligates the CRAs to do two things that are not normally required as a part of removing negative information:

They have to remove the fraudulent information from your credit report within four business days of receiving all of the valid documentation that proves identity theft has occurred. This is a very short period of time in comparison to the 30-45 days that are typically allowed for the credit bureaus to complete their investigations and remove the information.
They have to block the information from ever appearing on your credit reports again.

Scammers have abused this section of the FCRA by selling a service that takes advantage of these policies even when identity theft is not the cause of negative information appearing on someone’s credit report.

What Is a Credit Sweep?

This particular scam that disreputable credit repair companies often engage in is called the credit sweep.

The goal of a credit sweep is to cause the credit bureaus to remove negative information from your credit reports prior to the time that they are legally required to do so. The FCRA mandates that negative information must be removed from a credit report after seven years (with the exception of a Chapter 7 bankruptcy, which can stay on your credit report for up to 10 years).

A credit repair company tries to get the negative marks deleted from your credit report immediately rather than waiting until it is seven years old, when it will automatically be taken off of your credit report.

How Do Credit Sweeps Work?

The way a credit sweep works is the credit repair company asks you to pretend that you have been the victim of identity theft so that they can get the credit bureaus to remove accurate, valid negative information from your credit report.

The credit repair company has you go to an enforcement agency such as the police and file a police report claiming that your identity has been stolen. They can then show the identity theft report to the credit bureaus as “evidence” that the negative information on your credit report is there as a result of your identity being stolen.

If the credit sweep is successful, the CRAs have to remove all of the implicated negative information within four business days and prevent it from ever reappearing on your report, thus “sweeping” all the negative items off of your credit report.

Credit Sweep Fraud

As John puts it, it is clear that credit sweeps are fraudulent and illegal.

Not only are you lying to the CRAs, but also to the police, and filing a false police report is against the law.

In addition, lying to the credit bureaus and then defaulting on your credit obligations can land you in court, criminally charged with fraud.

Conclusions on Credit Sweeps

Is it worth it to try to fix your credit by purchasing a credit sweep and possibly being prosecuted for fraud? Or is it a better idea to pay your bills on time so that negative information does not hit your credit report in the first place? It’s up to you to consider the pros and cons.

If you learned something from this article, please share it so that others can be aware of the dangers of credit sweep scams.

You can watch the Credit Countdown video below. Find more content like this on our YouTube channel and in our Knowledge Center!

Read more: tradelinesupply.com

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January 22, 2021UncategorizedBy toptierfinancial

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Credit Repair vs. Tradelines [Infographic]

November 25, 2019CreditBy toptierfinancial

Perhaps the title “Credit Repair vs Tradelines” is not entirely accurate, but this is a common way that many consumers think of the two industries and even many credit repair companies as well. In truth, as our infographic illustrates, the two services really go hand-in-hand.

However, there are several differences that we will highlight in order to understand the full range of credit-related options. Be sure to check out our article below the infographic for all the details.

What Is Credit Repair?

The term “credit repair” can have different definitions depending on who you ask. Generally, however, credit repair is considered to be the process of mending poor credit that is a result of errors in your credit report or identity theft. This is accomplished by disputing inaccurate information in your credit file with the credit bureaus, who will investigate the claim and take appropriate action.

For example, if you have collections on your credit report that are being reported with inaccurate information, you can dispute the collection account and have it updated or removed from your credit report.

Sometimes people also use the term credit repair to mean fixing bad credit in general, using traditional methods such as bringing all accounts current and paying down debts.

For those who are seeking credit repair services through a company, you are probably interested in the process of repairing bad credit by disputing inaccurate negative information in your credit file. If your credit score is lower than the average range, going to a credit repair business may seem like an appealing option.

However, keep in mind that credit repair has its limitations. Since credit repair services focus on removing information from your credit file, once that is accomplished, there may not be much left in your file to show that you have a credit history at all. This is especially true of questionable credit repair companies who use dishonest methods to aggressively “sweep” your credit file of legitimate information.

In order to truly improve your credit score, it is important not only to remove inaccurate negative information but to also work on rebuilding your credit.

Credit repair focuses on removing inaccurate information from your credit report.

Tradelines vs. Credit Repair: What’s the Difference?
Addition and Subtraction

As we discussed above, credit repair can be thought of as the process of removing negative information from your credit report. In contrast, tradelines add information to your credit report.

A tradeline is simply any account in your credit file, so adding tradelines by definition bulks up your file. This can be helpful for people with short or thin credit histories, or those who are recovering from a period of bad credit and trying to rebuild their credit.

A short credit history means the age of your credit file is not very long, while a thin credit history means you have only a few accounts in your credit profile, if any. Credit scoring models factor in both the length of your credit history and your mix of credit, so having a thin or short credit file will likely result in a lower credit score rating.

Being added as an authorized user to tradelines that are in good standing and have a higher age (known as “seasoned” tradelines) could improve both of these factors by increasing your length of credit history and diversifying your mix of accounts.

In addition, seasoned tradelines for sale from a reputable company will have perfect payment histories and relatively low utilization ratios, which impact important components of your credit.

Tradelines can post to your report quickly, while the credit repair process may take longer.

How Long Does Credit Repair Take to See Results?

The credit repair process typically takes 1-6 months or longer, depending on how many disputes you need to make. Once you submit your disputes to the credit bureaus, they have 30 days to research the dispute and 5 more days to respond once they have completed the investigation. Sometimes, additional information may be needed, which can add more time to the process.

If you have a lot of errors to dispute, you may have to submit them a few at a time, which is why getting results can take several months.

Tradelines, however, can post to your credit report in as few as 11 days, and sometimes even faster. It just depends on the reporting period of the tradeline you are adding.

How Much Does Credit Repair Cost?

The cost of credit repair services can vary widely depending on the company, which services you need, and how long the process takes. Many credit repair organizations charge a monthly fee for their work in addition to an initial fee for pulling your credit reports. Typically, the monthly fees range between $60 to about $100 per month for basic credit repair services. [Disclosure: This article contains affiliate links.]

Purchasing tradelines, on the other hand, usually involves paying a one-time fee (unless you choose to extend the tradeline for additional time).

Is Credit Repair Worth It?

If you have bad credit, paying for a credit repair service is an option that you may want to consider, especially if you have a lot of errors on your credit report or if you have been the victim of identity theft and you need some help disputing fraudulent accounts.

If you do decide to hire a credit repair service to help you clean up your credit, make sure you research each company thoroughly and choose a legit credit repair company. Unfortunately, the industry has not earned the best reputation. Be sure to know your rights laid out by the Credit Repair Organizations Act (CROA) so you can protect yourself from being taken advantage of by shady credit repair companies.

Not everyone needs the help of a credit repair company to begin with. If you have one or two simple errors on your credit report, you may feel that you will be able to go through the credit repair process on your own and have those errors successfully removed or updated.

To answer the question of whether paying for credit repair is worth it, you’ll have to take a look at your credit report and decide whether the damage is extensive enough to warrant hiring a professional credit repair service or whether you want to try DIY credit repair.

How Credit Repair and Tradelines Work Together to Fix Your Credit

Credit repair and tradelines naturally go hand-in-hand. In one sense, tradelines pick up right where credit repair ends. Again, credit repair helps to “clean up” credit and tradelines help build or re-establish positive credit history.

One really should not exist without the other; the two techniques are most effective if done in tandem. Since credit repair removes information from your credit file, it may be necessary to add positive information to your file in the form of tradelines in order to truly rebuild your credit.

Tradelines can help to build or rebuild credit.

Buy Tradelines or Fix My Credit: Which Should I Do First?

It does not necessarily matter which one comes first. Both can exist at the same time.

However, if you have bad credit due to inaccurate derogatory information on your credit report, those variables will have an impact on your overall credit picture and could lead to tradelines having a diminished effect. In this case, the most effective course of action would be to repair your credit before adding tradelines.

On the other hand, it is never a bad time to have good things on your credit report. The timing of which strategy should come first ultimately depends on your individual situation and your own timeline.

For example, some credit repair programs take quite some time to accomplish. As we mentioned, is not uncommon for certain credit repair programs to take many months to complete. In these cases, tradelines may fit in at any given time during the credit repair process.

Credit repair and tradelines work best when used together as part of your overall credit strategy.

Why Don’t All Credit Repair Companies Offer Tradelines?

Surprisingly, not all credit repair companies sell tradelines or even know about tradelines. Sometimes tradeline companies are seen as competition to credit repair businesses because clients may end up spending money on tradelines as opposed to credit repair services.

However, as we have seen, credit repair works best when paired with tradelines. The best credit repair companies will provide you with all of the information and options that you need to make an informed decision about your financial future.

Conclusion

While tradelines and credit repair can both be effective in improving your credit, they are not the same thing. Rather, they are complementary strategies that work best when used together.

Don’t mistake tradelines for credit repair—think of tradelines as a way to build or re-establish credit. The best course of action for your credit is to evaluate your own unique situation and ask how tradelines can complement your credit repair strategy.

Read more: tradelinesupply.com

What’s the Difference Between Credit Repair and Adding Tradelines?

October 14, 2019CreditBy toptierfinancial

I was speaking to a consumer group recently and the topic of credit repair came up as a discussion point. I fielded questions about whether or not credit repair is legal, how to identify good credit repair companies, and whether the process of traditional credit repair is better or worse than adding tradelines to your credit reports. It occurred to me that there was a considerable disconnect between what is traditional or garden-variety credit repair versus adding tradelines to your credit reports, thus the purpose of this writing.

Traditional Credit Repair

While I have no dog in the fight between credit repair companies and the tradeline industry, it appears some credit repair companies misrepresent their services. Credit repair is often positioned as a way to get inaccurate or unverifiable information removed from your credit reports. It appears, however, that traditional credit repair is built more around getting negative information removed from your credit reports, whether it is accurate, verifiable, or not.

Some credit repair companies “jam” the credit bureaus with repetitive dispute letters.

While some credit repair companies are more surgical in their approach when communicating with credit bureaus and lenders, some credit repair companies choose to simply bury them with repetitive dispute letters. This process is commonly referred to as “jamming.” Sometimes jamming is successful in getting negative information removed while other times it isn’t. And, of course, if you’re successful in getting negative information removed from your credit reports, your credit scores may improve.

Traditional credit repair comes with a price tag. The price tag, frankly, is what makes credit repair credit repair. If a company charges you a fee for a service represented as one that will help you to improve your credit, that meets the definition of a credit repair organization in the Federal statute known as the Credit Repair Organizations Act. If there is no fee or valuable consideration, then it’s not credit repair.

Adding Tradelines

There are only three ways to add tradelines to your credit reports, and two involve associating your name with a credit card account. You can certainly apply for and open a new credit card account. If you are approved the lender will likely report the account/tradeline to your credit reports.

You can also have your name added to an existing account as an authorized user. An authorized user is someone who is authorized to use the credit line of a credit card account, but doesn’t have any liability for the debt. Credit card issuers often report credit card account information to the credit reports of the authorized user. And, if the account is in good standing and has a low balance relative to the credit limit, the result can be an improvement in your credit score.

You can add tradelines to your credit report by becoming an authorized user on someone’s credit card.

Being added to someone’s credit card as an authorized user is free, meaning the card issuer isn’t going to send you a bill for adding someone to your credit card account. There are, however, companies that will broker the authorized user process and they do normally charge a fee for their services.

The third option is fairly new, Experian Boost. Boost is an Experian service whereby they will add your utility accounts to your Experian credit report if you pay them from your bank account. The service, as of the date of this article, is free.

Boost requires a leap of faith as you will be asked to provide the name of your bank and your login credentials, including your username and password. Using that information Experian will gain access to your utility payment transactions and add them to your credit report. If you do not pay your utilities with your bank account, you cannot add them to your credit report using Boost.

It appears the difference between traditional credit repair and tradelines is really the difference between addition and subtraction. Garden variety credit repair is built around getting negative information removed or “subtracted” from your credit reports. The tradeline or authorized user strategy is built around adding positive credit card accounts to your credit reports.

Because there is no single path to a lower credit score, there is also no single path to a higher credit score. As such, both credit repair and tradelines can result in higher credit scores. However, there is no guarantee that either will lead to higher scores as the impact of removing information or adding information is highly individualized and difficult to predict with a great deal of precision.

John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group and the author of four books about consumer credit. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has 27+ years of experience in the consumer credit industry, has served as a credit expert witness in more than 370 lawsuits, and has been qualified to testify in both Federal and State courts on the topic of consumer credit. John serves as a guest lecturer at The University of Georgia and Emory University’s School of Law.

Disclaimer: The views and opinions expressed in this article are those of the author John Ulzheimer and do not necessarily reflect the official policy or position of Tradeline Supply Company, LLC.

Read more: tradelinesupply.com

The Future of Credit Repair and Tradelines

May 16, 2019CreditBy toptierfinancial

Big changes are happening in the world of credit repair and tradelines.

The tradeline industry is expanding rapidly. Gone are the days of only the wealthy having access to the strategy of credit piggybacking.

Innovations by tradeline companies have made tradelines more accessible than ever, helping to promote equal credit opportunity.

The top credit repair companies are getting on board with authorized user tradelines as a way to take their clients—and their businesses—to the next level of success.

Keep reading to find out why the future of credit repair depends on tradelines.

Tradelines & Credit Repair Go Hand-in-Hand

Credit repair and tradelines work best together. Click to go to the full version of our infographic.

As we discussed in “Credit Repair vs. Tradelines,” when it comes to establishing or re-establishing credit, credit repair can only go so far.

It can remove inaccurate information, but then what is the client left with? They may end up with a thin file or they may have accurate negative information that cannot be removed.

The client still needs to show that they have a credit history. Removing too much information from their credit file could backfire and hurt their credit more than it helps.

The client not only needs credit repair but also credit restoration and reestablishment.

Credit repair is only half of the equation. The other half of the equation is tradelines, which can add positive credit history to a client’s credit file to reestablish their credit.

Unfortunately, the credit repair industry has not yet fully come around to the idea of using tradelines as an integral part of their business model.

This is changing rapidly, however, as credit repair businesses are realizing why authorized user tradelines are so valuable and how easy they are to add to their credit repair services.

How Credit Repair Companies Can Benefit from Tradelines

Although many credit repair businesses have historically been resistant to using tradelines, they would do well to reevaluate this stance. Tradelines can allow credit repair businesses to expand their offerings and grow at a much faster pace.

Here are some of the benefits credit repair companies can reap from integrating tradelines into their business:

Tradelines can enhance clients’ results and increase customer satisfaction.
Tradelines provide an opportunity to upsell and add value to your services.
It is easy to integrate tradelines into a credit repair business model.
Selling tradelines can increase your monthly revenue by thousands of dollars.

Why Don’t More Credit Repair Companies Offer Tradelines?

The legitimacy of tradelines has been confirmed by the U.S. Congress.

One common concern we hear from credit repair companies is the question of whether tradelines are legal. While we understand why this is such a common question, we want to clear up the misconceptions people have about the legality of tradelines.

Tradeline Supply Company, LLC does not give legal advice, but we can look to the government organizations that have provided guidance on this issue.

In 2008, the issue of piggybacking using AU tradelines was discussed in Congress after FICO tried unsuccessfully to eliminate the ability for AU tradelines to be factored into FICO scores.

Because of the Equal Credit Opportunity Act of 1974, which prohibits credit discrimination, FICO was forced to admit that they could not exclude certain AUs from their credit scoring models. The fact that this congressional hearing protected the status of AU tradelines supports the idea that tradelines are legal.

Understandably, however, the tradeline industry has earned a reputation for not being the most trustworthy business. Unfortunately, there are illegal and unethical tactics that take place within the tradeline industry that consumers should watch out for.

Tradeline Supply Company, LLC is changing the tradeline industry for the better by fighting unethical and illegal practices.

There are plenty of companies out there that sell tradelines while also participating in questionable and potentially fraudulent activities, such as address merging, selling primary tradelines, and using CPNs.

It’s important to work with a tradeline company that operates ethically and is fully compliant with laws and regulations. With our high standard of integrity, Tradeline Supply Company, LLC stands out from the tradeline companies that engage in unethical practices, and we aim to change the entire tradeline industry for the better.

Conclusions on the Future of Tradelines and Credit Repair

Tradeline companies who operate with ethics and integrity are breaking down the stigma of tradelines and showing how they help to create equal credit opportunity.

As a result, authorized user tradelines are no longer an underground strategy accessible only by the privileged few. Anyone can now use tradelines to build credit. The consumers who stand to benefit most from tradelines include those seeking credit repair.

While credit repair helps to remove damaging inaccuracies from consumers’ credit reports, removing negative information is often not enough to get people to where they want to be. Tradelines represent an opportunity to add positive credit history, helping to restore and rebuild consumers’ credit.

Despite this fact, some credit repair companies still do not offer tradelines to their customers because they feel that tradelines are a threat to their business. They see tradeline companies as competition because clients may end up spending money on tradelines as opposed to their credit repair services.

However, this outdated view of the tradeline industry is preventing credit repair professionals from better serving their customers and ultimately stunting the growth of their businesses.

Credit repair companies who are adapting, innovating, and poised to thrive in changing times understand that they can no longer ignore the value of tradelines.

Tradelines allow credit repair businesses to offer more services, get better results for their clients, and multiply their profits. Simply put, credit repair companies cannot afford to miss out on tradelines if they want to keep up with the times.

Credit repair works best when paired with tradelines. In the future of credit repair and tradelines, the best credit repair companies will thrive by using tradelines to complement their credit repair services and maximize results for their clients.

Read more: tradelinesupply.com

Are Credit Sweeps Legal? – Credit Countdown

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Credit Repair vs. Tradelines [Infographic]

What’s the Difference Between Credit Repair and Adding Tradelines?

The Future of Credit Repair and Tradelines

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