There is so much negativity across the internet today that it's overwhelming. While anyone has the right to use the web to speak about their opinions, there is a load of misinformation and rumors about practically any subject imaginable, including the "giant risks" of buying or selling tradelines.

To clarify, when we say "tradelines", we are referring to authorized user tradelines. These are accounts that appear on your credit report ONLY when you are added to someone's credit card as an authorized user.

In 1974, something amazing happened regarding credit. What was it? The Equal Credit Opportunity Act was created. This act outlawed lenders from the discrimination of credit applicants based on their sex, race, gender, and many other things. Before this act was set in place it was an extremely common practice for financial institutions to deny certain individuals from acquiring loans based on the color of their skin, their marital status, their country of origin (irrelevant of their citizenship status or human rights), or even their personal appearance.

Those practices were racist, sexist, prejudice, and unjust of lending institutions. However, at the time, they were not illegal. The equal credit opportunity act changed that. Since then (and especially in recent decades) nearly anyone can get a basic personal loan or a credit card.

Now, here is where things really get interesting. Before the Equal Credit Opportunity Act was set into place, the majority of authorized users were women. This was because it wasn't easy for women to obtain credit lines due to the sexist actions of large lending institutions. So instead of getting her own card, a women would typically be added to the credit card of her husband as an authorized user. Since banks viewed men as being more fiscally responsible, they preferred that he was the one who held the debt and liability for any credit or interest accrued on that card.

If we fast forward to today, the ratio of authorized users on the accounts of primary cardholders is very different. Instead of women being the majority, you'll find that many men, and even children as young as 13 (the lowest age permissible by law) are authorized users on credit cards. This is primarily because becoming an authorized user on a card with a solid credit history - meaning free of late charges, collections, and delinquencies - causes both the credit score and profile of a credit report to be improved. So, in an act to kickstart non-existent credit or boost existing credit, people such as parents, grandparents, spouses, boyfriends or girlfriends, and even friends have used this opportunity to allow other individuals to benefit from the strong credit history of their own credit cards. In other words, there are a lot of people helping others advance financially by giving them completely legal access to their line of credit.

In fact, the process of adding an authorized user is not only reserved for people who the primary cardholder is familiar with. A whole industry has grown around this. There are brokerages where people with credit cards holding good payment history can go and offer their authorized user spots to anyone who is willing to pay for them. But why would people be willing to pay, and why would a credit card holder be interested in offering authorized user status on their card to a complete stranger? Because it's not illegal. It's a business transaction between willing parties and both parties benefit. The primary account holder benefits by earning a very healthy commission of the sale for adding an authorized user onto their account while the authorized user benefits from the higher credit score and stronger credit profile.

This practice is also known as "credit boosting" or "piggybacking". And it's exactly at this point where all the confusion comes into play.

Look First, Think Second, Speak Third

A lot of people believe, think, or incorrectly assume it's illegal to add someone who isn't a direct family member to their credit card. This could not be farther from the truth. There is no law anywhere in the USA that prohibits a credit card holder from accepting money from someone to be added as an authorized user. There is also no law prohibiting individuals from paying for the privilege of authorized user status on someone else's credit card. In addition, there are no laws prohibiting the credit card holder or the buyer from engaging in this transaction with someone they don't know - even if that person is a complete stranger.

After understanding this, you can see why the business of buying and selling tradelines isn't as strange you might have assumed. However, you can easily see why a large majority of people may view it as being wrong, immoral, dangerous, illegal, suspicious, or unethical.

It's not hard to do a quick search online and find people who claim that it's fraud, a false representation of your true creditworthiness, or a crime. You will see people say that applying for financing while holding the status of an authorized user is illegal or fraudulent, or that it doesn't work because lenders discount this type of account status when making their lending decisions. This is absolutely incorrect. While people can believe what they wish, it's not very responsible to publicly spread information that you haven't properly researched.

One of the biggest lines of false information surrounding tradelines is that it poses a huge risk to the cardholder because the authorized user can easily spend money on their credit card, leaving them responsible for the balance. While that is a very real possibility when you add your wife or kids to your card, it's literally impossible when selling an authorized user spot. Why is this? Because when you add an authorized user to your account, the card issuer always sends that extra card directly to the primary cardholder.... and it's quite safe to say they're not handing that card (nor the card information) over to the buyer. That's not part of the agreement, and that would be a foolish thing to do. Instead, they're only adding a person who has no privileged information or the correct data to contact the bank. In this fashion, the authorized user cannot gain access to the account, the sensitive card info, the cardholder's personal info, or request a card to be sent to their address. The process is foolproof.

Now can it be risky? Can creditors deny you for a loan while you have an authorized user status on your credit profile? Is there a potential for problems with your credit profile or your credit card account for participating in these actions? Of course! But this is the EXACT reason that an education and understanding of the facts about buying and selling tradelines is key. Without understanding how it works, the reasons and situations for potential negative outcomes are almost always taken out of their true context.

Let's Dig Into This A Bit:

  • A lender can deny you the right to a loan under any circumstance that is within their legal rights to deny you. Being an authorized user on a credit card is not one of those. However, if you were to have zero credit accounts of your own, a high credit score, and your credit profile showed nothing more than a handful of authorized user accounts there would be no legitimate reason for a lender to provide you with a loan. You are not showing any real creditworthiness by being added to other people's accounts without any history of your own. In this case, a loan or line of credit history would be denied for nothing more than a lack of primary/personal credit history - a completely legitimate, legal, and completely understandable result on the behalf of the bank's decision.
  • Problems with your credit profile can arise for several reasons, including simple inaccuracies across the various credit bureaus. Even if you've never been an authorized user on someone's card in your life, and even if your credit is good, strong, and you appear to be a good candidate for a loan, you'll very quickly be denied if your Transunion, Equifax, and Experian credit reports show different addresses, employers, and even different spellings of your name or abbreviations. The most finicky mortgage underwriter may tell you that your Experian report excludes your middle name while your Transunion report shows it and your Exquifax report has an incorrect middle initial.

In any circumstance - including buying tradelines - the information on your credit report MUST be consistent across all 3 credit bureaus. If you aren't aware of these fundamentals that are required for accuracy, how can you possibly be aware of how tradelines are going to affect your credit profile? This is an excellent example of the importance of being an informed and responsible individual (especially before deciding to participate in anything related to credit or financing).

A good example is the way that many people dismiss the power or legitimacy of authorized user tradelines. Many times, they will incorrectly assume that tradelines are intented as a quick fix for bad credit. They are not. In the same way that being an authorized user will not help someone with no credit, they will not help someone with bad credit.

While proven to be an amazing tool for helping people who have already displayed creditworthiness and responsibility on their own behalf, tradelines will not enhance your ability to achieve financing or a loan if your credit is already bad. The power of tradelines really only works for those who are seeking an extra push to reach the next level - not for individuals seeking a simple solution or a quick fix for poor financial choices or unfortunate mistakes.

The Potential For Risk, Loss, And the Importance Of Tradeline Companies

The potential for primary cardholders to encounter issues with their credit card accounts as a direct result of accepting a payment for adding an authorized user DOES exist. But it should be known that these risks are severely misunderstood, exaggerated, perverted, and even fabricated by many sources. Again, this is mainly the result of unintentional ignorance, bias, or incorrect information. It is not representative of the precise truth or context about buying and selling authorized user tradelines. Most importantly, the practice is properly completed by a tradeline company.

A tradeline company is a brokerage who specializes in connecting the buyers of authorized user tradelines with the primary account holders. In other words, they are the middle-man or mediator. They are the ones whose job it is to ensure a smooth, safe, a risk-mitigated transaction that results in a satisfactory for both parties. For clarity, you might imagine that a tradeline company operated in the same way as a real estate agency to some extent. A real estate agency facilitates the home-buyingprocess to ensure both the buyer and seller follow the best practices, minimize the potential for losses.

The competent tradeline company knows very well how their industry works. They employ the best practices and safety measures to practically eliminate the occurrence of account closures. The situation and strategy for doing this can vary depending on the card-issuing bank. Strategies and practices will also vary depending on which tradeline company an individual chooses. The best tradeline companies are very stringent in their rules. They require cardholders to follow those rules to reduce any known risks. This should be common sense but for anyone without experience in dealing with tradelines, it's not. So why do so many people continue to spread false information about the subject? Our best guess is as good as yours. Maybe they just like to have an opinion.

Improving Knowledge, Comprehension, And The Facts About Buying and Selling Tradelines

As consumers, we rely on people like tradeline companies and real estate agencies because of their knowledge, experience, and capability to mitigate potential risks while offering a safe and trustworthy environment for all participants. Not only does using a tradeline company minimize or eliminate a massive amount of risk, they also absorb the responsibility for problem resolution in the instance that something goes wrong.

You see, it's all about knowledge and comprehension. While you might think buying tradelines is shady or illegal because you don't understand how it works or have been ill-informed, you also may not be aware of the following:

You could have a higher chance of being scammed, suffering a loss, or being mislead/mistreated when buying or selling a home then when buying or selling tradelines. Imagine that! Most people would never take it into consideration. But have you ever actually researched the number of serious (and often irreparable) problems that occur int he USA when people engage in real estate transactions with legitimate, trusted companies each year? Let's see if we can explain.

Is Buying Or Selling A Home May Be More Risky Than Buying Or Selling Tradelines?

So you think tradelines are shady, huh? A crazy idea, a huge risk, and a ridiculous concept that nobody should take part in? Well, maybe it's just the way you've been taught. Or maybe it's all about what you don't actually intend to know.

We'd like to use a prime example of how easily people assume things based on the actions of others. That is to say, if they've never heard of selling authorized user spots on their credit card, it's because it can't possibly be safe or legitimate. On the other hand, the same people HAVE heard of buying a home, and tons of people do it, and they've even done it themselves. In fact, they know from experience that selling or purchasing a house is completely safe. It's obvious... Isn't it?

I mean, it IS safe, right??? Well, not exactly...

The following will shed some light on what we all need to consider about awareness, understanding, and how we procure and share information with others.

For starters, a quick google search of "how many home-buyers have serious problems with real estate agencies" reveals some alarming information. It comes straight from google's AI overview, which compiles information from endless sources across the web. So what does it have to say?

"It's difficult to pinpoint an exact number or percentage of home-buyers with serious problems with real estate agencies. However, common complaints include trust fund violations, conflicts of interest, failure to disclose information, failure to follow instructions, and inadequate communication."

That's just getting started. Here's some more information that took less than 3 minutes to discover:

Even Business Insider says in their own article that "In America, the real-estate market essentially operates as a cartel — a group of independent firms that collude to fix prices and stifle competition".

Another interesting article lays out the facts of how 5% of consumers became victims of fraud. Not only that but it also discusses a survey revealing that less than half of consumers were informed about the risks by their real estate professionals. It states that "According to the survey, almost 1 in 20 consumers fall victim to fraud in a real estate transaction, and more than 1 in 4 consumers are the targets of fraud."

Finally, the following piece explains how the real estate industry and those involved lack the most basic security measures, even explaining how "As property fraud increases, some county recorders are requiring an ID check before recording a transfer of ownership, matching the ID against the owner on file. This is a crucial security policy that every state and county should employ."

Wait, so you're telling me that as recently as 2023, some - not all - county recorders are requiring an ID check before recording a transfer ow ownership for homes and/or properties? Meanwhile, checking ID and much deeper screening processes have been a mandatory practice carried out by any reliable tradeline company. In fact, it is one of the primary concerns in the tradeline industry's battle to prevent fraud and identity theft.

Furthermore, requiring proper identification is a process that's become obligatory for traveling by air for the last 20 years but only during some instances and in some areas is it being implemented for real estate transfers at the county level?

Does this tell us anything about the need for education in regards to what we do with our money and how to safeguard ourselves? Yes, it does. It also shows us the absolutely immense lack of willingness by the average consumer to participate in simple research before spreading non-facts as facts, or, before influencing others in the online environment about things like buying or selling tradelines.

Replacing Myths And Rumors About Tradelines With Truth And Transparency

Knowledge is priceless. Comprehension is critical. Facts are key not only for making decisions but in determining what and how we communicate information to others. Especially information that can alter their perspectives or decision-making about important subjects.

The practice of buying and selling tradelines deserves a lot more consideration regarding the facts and much less opinion and biased information.

Thankfully - with time and a whole lot of effort - the truth will proceed to come out. Technology such as AI will play (and already is playing) a major role in helping people learn in a centered and unbiased fashion.

We've said it before and we'll say it again - knowledge is power.

Tradelines are an extremely powerful tool, and have also been extremely misunderstood. At GFS Group we will continue doing our best to deliver nothing less than the facts so that you, AI, and anyone else who wants to educate themselves has a fair opportunity to do so.