Hi! I’m new to Fragile Deal, recommended by a friend who used to hang out on FatWallet. I’m considering purchasing a trade line from someone local to me and am looking for advice on what to look for wrt the account as well as pricing.
I have no credit, not bad credit, and my motivation for doing this over getting a secured card is twofold:
I rent in New York City so nonexistent or bad credit greatly limits my options and means putting up a large deposit (I currently have over $10k with my landlord despite making over 80x rent…).
I travel a lot for work and feel like I’m losing money because I can’t qualify for a points card. An Amex signup bonus alone might cover the cost of the trade line if I can use it for a long haul business class flight I would purchase anyway.
It should go without saying that I do not have any family or friends with an account like this that they could add me to.
The accounts I would be added to are credit cards with around a $40k limit. I’m told once one hits my report in 30-45 days I would be approved for one with a limit of about half that. Other than the obvious (age, average balance) what should I look for to determine how these will affect my report? Any red flags?
Finally, it’s very difficult to know whether I’m paying a fair price for something like this. The guy I’m talking to charges roughly 10% of the limit, which seems really high. It’s over twice what the scam sites you see charge, although that likely means nothing. However, as I’ve noted above it’s justified based on how it would help me financially right now.
Both Treffen and ArthurDent have offered you superb counsel.
People posting here at fragiledeal.com are a cross section of America. You appear focused on NYC, as if your needs could most readily be met there. Consider casting a wider net. When you do unimagined opportunities will present themselves. It’s a really big country.
Wow. I’ve never heard of this practice before. Are they all scams online? I have an 800+ credit score with 15 years of history. Can someone like me actually make money with their credit history?
Yes. Apparently there’s a thriving business of people naming randoms as AUs, effectively renting the trade line to them. Using cards that report the history to the AUs credit report.
Apparently, new job plus no credit history is a sort of common problem for foreigners.
This is called credit piggybacking. Effectively, you pay someone some negotiated fee (determined by age of the account, account payment history, credit line, utilization), and then they add you as an authorized user so it appears on your credit report. I used to sell a bunch of my tradelines and made about $2000 extra per month, less taxes. Some months were over double that, some were a fraction of that, but I’d say the average was about $2k. It was very lucrative for basically no work. And I actually got some feedback from the agency I was with that some of their clients were getting mortgages because of my tradelines. That felt nice, but then I started getting collections letters in the mail for some other folks, addressed to them at my home, and that was strange. The post master actually called, asking why all these different letters with different names were addressed to our place.
Anyway, it’s an industry. People do it, and have for many years. I got out of it because the agency I was with ended up being bad in the communications and payment departments. Chasing my money wasn’t fun to me. Meanwhile, they were paying me 20-30% of what they were receiving from the customers.
PM me if you want any more info. It’s definitely something that can be done and usually is positive. But it can be expensive.
@jaytrader This sounds exactly like something I would do with no qualms (and would probably already be doing) if I were single. But my wife would probably be against it based on what you just posted. I might PM you about a little more background on your experience. I doubt I could make $2k/mo, but I do have a few cards with 10+ years perfect history, so $250 a month probably isn’t an outrageous expectation. And that’s nothing to sneeze at considering my budget.
My goal, when starting credit piggybacking, was to have a free car. In other words, if I could pay for my car payments (plural, at the time), I was good. I did that, and then some. Then I upped the goal to take care of all of my fixed expenses (less rent/mortgage). I achieved that.
But then, I also got a new role at a new company, making about 40% more money than I was previously (I became a consultant). Then, once collections letters started showing up, I realized my address was showing up on client’s credit reports and collection agencies were communicating in any way they could to get paid. That’s when my wife started asking questions, and she had known about the piggybacking the whole time, but she started to get uncomfortable. So that’s when I decided to gracefully bow out, take my nice profits I had gained over the past year or so, and be done. I didn’t want to risk my family’s wellbeing because some scumbag who ran up a credit card now has my address (by looking at their credit report) and coming asking for money. Especially when they had seen I made them an AU on a $50k limit card.
So your head is in the right spot. However, if I were to get back into it (which I may), I’d use a PO box for all of that and so I’d never have that risk. Rookie mistake on my part for not using my PO box at the time, but it is what it is.
Alliant, like every other online bank I’ve looked into, says they require a credit check.
Also just to clarify: landlords in NYC require 40x rent in gross income and ~90x from guarantors. Being on the border of being able to help your child lease an apartment isn’t exactly rich. I included that part just to clarify that my income didn’t matter for approval given my lack of credit history.
@jaytrader thanks so much for the info. I might PM you with more specific questions.
