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Why You Should Never Pay to "Rent" a Tradeline


Why You Should Never Pay to "Rent" a Tradeline

The desire to earn better credit is not only understandable, it is also incredibly smart. The condition of your credit will have a big influence over your financial life. Want to purchase a home or vehicle? Your 3 credit reports and scores play a big role in your ability to qualify for a loan and help determine the rate you will be offered if you are approved. Applying for a new job or promotion? Your credit reports might play a role again. In fact, the condition of your credit could be considered whenever you take out insurance coverage, open a new mobile phone account, and in many more situations than you probably ever believed possible.

Hopefully you already understand the importance of earning good credit and you are working to try to repair the damage from any past credit problems you may have encountered. Yet the truth is that the road back to healthier credit is not always a quick journey. You can certainly do things to help speed the process along such as establishing new, positive accounts and perhaps working with a reputable credit repair professional. Even so, it may require a little patience and discipline on your part before you can expect to earn good credit again.

Tradeline Rentals

Because credit is so important and because improving your credit can sometimes be a slow and tedious process (especially if you are working to repair your credit on your own), you may find yourself tempted to take a few shortcuts along the way. The temptation is understandable, but taking shortcuts to try to improve your credit can actually be quite dangerous. One such shortcut which you should avoid at all costs is known as tradeline renting.

There is no question that being added onto someone else's credit card account as an authorized user has the potential to help your credit scores. If a loved one adds you onto an existing, well managed credit card account (no late payments, low or $0 balance) the impact upon your personal credit scores might be very positive once the account shows up on your credit reports. If the account has been opened for a while (aka it is "seasoned") and if the credit limit on the account is high then the positive credit score impact may be even more significant.

There is certainly nothing wrong with being added as an authorized user onto a credit card belonging to a friend or family member. As already mentioned, the authorized user strategy can potentially be a very effective step toward building or rebuilding your credit. If you are considering gaming the system by renting or "piggyback" on a stranger's credit card account as an authorized user, however, you could possibly find yourself in hot water, legally speaking.

The tradeline renting scam comes in a few different flavors. Typically it is a service which is facilitated by a broker or a middle man who, for a sizeable fee, will connect you with a stranger who has older or seasoned credit card accounts which are in good standing. Once you pay your fee, the stranger adds you onto their credit card account as an authorized user. The middle man pays the stranger with good credit a small portion of the fee collected from you and then puts the remainder in his own pocket.

It is arguable whether or not the practice itself of paying a stranger to add you as an authorized user is illegal. However, if you apply for any new loans after paying to be added to a stranger's credit card account then there is no question that you could run the risk of being charged with bank fraud. Plus if you applied for your new loan over the phone or via mail, you may risk being charged with mail fraud or wire fraud as well.

Additionally, FICO's newer credit scoring systems have logic designed to detect piggybacking scams. As a result, even if you pay to be added onto a stranger's account, you might receive no benefit from the tradeline whenever a lender pulls your credit scores. With so many legitimate means of repairing poor credit, it simply is not worth the risk of renting a tradeline in an attempt to speed up the process.

CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert and discover legitimate ways to work toward repairing your credit problems.


Michelle Black is an author and a credit expert with nearly 2 decades of experience, the credit blogger at, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars on various credit and financial topics. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft.


Tackling Your Holiday Credit Card Debt


Tackling Your Holiday Credit Card Debt

You may have began the holiday season with a firm conviction: I will not overspend this year. I will only spend what I can afford. I will not go into debt. Yet the truth is that despite the best intentions, we Americans are notorious for digging ourselves into big financial holes during the holidays.

If you find yourself wanting to run away and hide from your impending credit card statements, this article was written specifically with you in mind. It is too late to undo the damage your holiday spending sprees may have caused, yet that is no excuse for wallowing in self pity for the next few months and allowing the damage to fester.

Excessive credit card debt can place a burden upon you financially and can damage your credit scores as well. As a result, it is important for you to take action immediately so that your credit and your finances can start to recover.

Make a List, and Check It Twice

The first component in your post-holiday recovery plan needs to be a detailed list of the damage which has already been done: aka a list of your outstanding credit card balances. You should begin the list by writing the smallest balance at the bottom and working your way upward. Here is an example to help you get started.

·        ABC Bank Card: $2,000 Balance

·        XYZ Bank Card: $1,500 Balance

·        QRS Bank Card: $800 Balance

Start at the Ground Floor

Credit card debt harms your credit scores even when you make all of your monthly payments on time. The reason why credit card debt can cause so much credit score damage is because 30% of your FICO credit scores are largely based upon your revolving utilization ratio (aka your credit utilization). Your credit utilization is basically the relationship between your credit card limits and your credit card balances. The closer your balances climb to your limits the worse the impact will be upon your credit scores.

Credit scoring models like FICO and VantageScore pay attention to the credit utilization ratio on all of your credit cards combined and also to each of your credit card accounts individually. This means that each time you pay a credit card account off you will probably see at least some credit score increase. In fact, when you pay a credit card balance down by even a mere 10% you might begin to see some positive credit score movement.

By paying off your lowest credit card balances first you may be able to bring about a positive increase in your credit scores more quickly. For example, paying off the $800 on the card with the smallest balance in the example above (QRS Bank) would probably help your credit scores more than if you paid the same $800 on either of the cards with the higher balances (ABC Bank or XYZ Bank). Starting at the ground floor and working your way up as you pay off your credit card debt will give you a lot more bang for your buck.

A Commitment to Change

The most important step you can take as you work toward eliminating your holiday credit card debt is to resolve to break the bad habit of overspending once and for all. In fact, if you will cut your spending in other areas you could free up additional funds to help you wipe out your credit card debt much more quickly. Paying off your credit card debt may not be easy and no one ever said that cutting spending is fun, but making a positive financial change is worth the sacrifice. Take control of your finances so that your finances won't control you.



Michelle Black is an author and leading credit expert with nearly a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.


Equifax Data Breach: How to Find Out If You're Affected and What to Do About It If You Are


Equifax Data Breach: How to Find Out If You're Affected and What to Do About It If You Are

Last week credit reporting giant Equifax announced some very unsettling news. Equifax fell down on the job. There is no other way to put it.

The credit reporting agency experienced a massive data breach which unfortunately compromised the personal identifying information of approximately 143 million people. For a company which makes billions of dollars collecting, storing, and selling your private information this breakdown in security is not just negligent, it is inexcusable. 

If you understandably missed this disturbing announcement last week amidst all of the news coverage about Hurricanes Harvey and Irma, here is what you need to know right now.

Why This Breach Is a Big Deal

Data breaches have occurred with increasing regularity over the past several years. Insurance providers, hospitals, retail chains, online gaming services, and many other businesses have experienced cyber theft which compromised the personal information of millions. In fact, it almost feels as if you cannot turn on the news or log into your favorite social media newsfeed without hearing about a new breach of security.

The regularity of these data breaches can unfortunately be desensitizing. It can cause you to drop your guard. That, however, could be a dangerous mistake especially if your information has indeed been compromised in the Equifax breach.  

Equifax's breach does not simply involve credit card information which can be easily changed to prevent fraud. Instead, the breach involves exposed information you are not going to be able to change: names, social security numbers, dates of birth, etc. The hacked information could be sat on for years, allowing you to forget about the danger, before any actual fraud or identity theft is even attempted. The stolen information will be just as valuable to thieves in the next week, the next month, the next year, and even potentially the next decade to come. If you were among the 143 million consumers compromised, your exposure to identity theft is now a long term risk.

Action May Be Needed. Panic Is Unnecessary.  

Now that you have digested the bad news, let's talk about what you can do to protect yourself. Panic is not going to solve anything, but a solid plan can go a long way.

1. Find Out If You Are a Victim

Equifax maintains credit files on over 200 million consumers. That means that approximately 29% of you were fortunate enough not to have your personal information compromised. You can find out if you were exposed to the data breach here:

(NOTE: Equifax initially came under fire on social media and from several lawmakers, including New York Attorney General Eric Schneiderman (D), for including fine print in the terms of service on the above webpage which reportedly may have attempted to dupe consumers into waiving their rights to enter a class action lawsuit or to sue Equifax over the breach. Equifax has since changed their terms of service to remove the offending clause. Really, Equifax?!)

2. One-Call Fraud Alerts

If you visit the website above and discover that your "personal information may have been impacted by this incident" then placing a fraud alert on your credit reports may be a good next step. You can easily place a 90 day fraud alert on all 3 of your credit reports by requesting an alert with Equifax, TransUnion, or Experian. Per the Fair Credit Reporting Act (FCRA), once any of the credit bureaus receives a request for a fraud alert they must communicate that request to the other 2 remaining bureaus on your behalf.

The FCRA also gives you the right to place an extended, 7 year fraud alert on your reports as well. However, you will first need to prove that you have actually been a victim of identity theft (aka someone has opened or tried to open a fraudulent account in your name). Both types of alerts are free under the FCRA.

3. Credit Monitoring

Equifax is offering free credit monitoring (TrustedID) for 1 year to anyone who wants to take advantage of the offer. It is not a bad idea to take advantage of this offer, but it is probably not going to be enough. You need to keep in mind that this is a 3-bureau credit monitoring service but you will only have access to your Equifax credit report. Additionally, the service is only free for 1 year and you will need to monitor your reports for much longer than that (forever essentially) if you were a victim.

If you want to truly keep an eye for fraud on your credit reports then a 3-bureau monitoring service with access to all 3 of your credit reports is probably best. However, you will probably have to pay a fee for such a service. There are a lot of good services out there which offer 3-bureau and 3-score monitoring with 3-report access. Some are more expensive than others. If you are looking for some comparisons of available services, visit

It has always been important to routinely check, monitor, and review your credit reports for fraud and errors. If your information has been exposed in the Equifax data breach, that importance has simply become magnified for you more than ever before.

4. Credit Freeze

Fraud alerts can potentially help to prevent identity theft and credit monitoring can help you to quickly discover fraud when it occurs. However, if you want a tool which can help to prevent fraudulent accounts from being opened in the first place then a credit freeze is the biggest gun you can use to defend yourself.

When you place a credit freeze your credit report is taken out of circulation. This means that no future lender will be able to access your reports. If a scammer tries to use your information to open a fraudulent account then the freeze will stop a lender from pulling your credit and, viola, any future loan applications will most likely be denied as a result. Almost no lender is going to approve a new application if they cannot pull your credit.

It is worth pointing out that it is not free to place a credit freeze unless you have actually already been a victim of fraud. However, credit freezes are relatively inexpensive (under $10 per credit bureau at the time of publication). Unlike fraud alerts, you must place an individual freeze at Equifax, TransUnion, and Experian.

Additionally, the credit bureaus also offer a service known as a "credit lock." Equifax has even announced that it will be giving away credit locks for free to victims of the breach. While credit locks are advertised by the credit bureaus as more convenient than freezes,  it is unclear whether or not they offer the same protections. Credit freezes are generally covered by state law, potentially giving you more protection in the event that there is a problem.

5. Keep It In Perspective

The truth is that identity theft is a growing crime. Over $16 billion dollars was stolen by fraudsters and approximately 15.4 US consumers were affected by identity theft in 2016 alone. Even before this Equifax data breach, your personal information may have been vulnerable to thieves in one way or another.

It has always been and will continue to be your personal responsibility to check your credit reports regularly in order to verify that they contain only accurate information about accounts you really applied for and opened yourself. (Remember, you can check your 3 credit reports every 12 months for free at If you ever discover fraudulent accounts on your credit reports the Fair Credit Reporting Act (FCRA) gives you a long list of rights with a lot of teeth to help you recover from the identity theft.

If you want some tips on how to recover from identity theft, CLICK HERE. You have the right to try to correct identity theft issues on your own, but you can also hire a professional credit expert to work on your behalf if you are too busy or feel too overwhelmed by the process.


Michelle Black is an author and leading credit expert with a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.


Consumer Financial Protection Bureau Sues Navient


Consumer Financial Protection Bureau Sues Navient

In one of its final moves under the former presidential administration, the Consumer Financial Protection Bureau (CFPB) filed three separate lawsuits against the student loan servicing giant Navient. Navient currently services the student loans of over 12 million borrowers in the United States, loans which amount to over $300 billion in both federal and private student loan debt.

The student loans in question are not actually issued by Navient itself. Instead the company collects the payments on some 12 million loans on behalf of the US Department of Education, numerous private banks, and other lenders as well. There are 9 total student loan services currently under contract with the US Department of Education, but Navient is the largest servicer. In fact, nearly 25% (1 in 4) of student loan borrowers currently have Navient as their loan servicer.

The Allegations

According to the CFPB Navient failed student loan borrowers and repeatedly cheated many of them out of their rights to lower payments. Richard Cordray, director of the federal watchdog agency, alleged in the CFPB's statement that "For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today's action seeks to hold them accountable."

Additionally, the CFPB took issue with Navient's alleged tendency to direct borrowers toward forbearance when financial troubles arose instead of reviewing income-based repayment options. When a borrower takes out a forbearance of their student loan the interest charges on the debt continue to accrue even while payments are not actively being made. The result? An additional $4 billion in interest charges were added on top of the principal loan balances of the Navient-serviced borrowers who enrolled in multiple and concurrent forbearances between January 2010 - March 2015.

Navient's Version of the Story

Navient, of course, has a very different side of the story to tell. The company vehemently denies any wrongdoing whatsoever and plans to fight the CFPB's allegations.

According to Navient the CFPB actually issued an ultimatum to the company to settle by Inauguration Day or be faced with multiple lawsuits. In a press release the company stated that "Navient rejects CFPB ultimatum to settle by Inauguration Day or be sued. The allegations of the Consumer Financial Protection Bureau are unfounded, and the timing of this lawsuit—midnight action filed on the eve of a new administration—reflects their political motivations."

In addition to allegations of the CFPB suing as a result of political motivations, Navient also maintained that the federal agency was trying to apply newly updated student loan servicing standards to Navient's past dealings with borrowers. In the aforementioned press release Navient stated that the company  "welcomes clear and well-designed guidelines that all parties can follow, and [they] had hoped [their] extensive engagement with the regulators would achieve this objective. Instead, the suit improperly seeks to impose penalties on Navient based on new servicing standards applied retroactively and applied only against one servicer. The regulator-asserted standards are inconsistent with Department of Education regulations, and will harm student-loan borrowers, including through higher defaults."

Finally, in response to the allegations that Navient pushed borrowers toward forbearance options in lieu of income-based repayment options, the company pointed out that nearly half (49% to be exact) "of loan balances serviced by Navient for the federal government are enrolled in income-driven repayment plans," and that "assertions that we do not educate borrowers about IDR plans ignore the facts."


Michelle Black is an author and leading credit expert with a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.


Why Your Credit Card Doesn't Show the Current Balance On Your Credit Reports


Why Your Credit Card Doesn't Show the Current Balance On Your Credit Reports

Do you check your credit reports and scores often, perhaps even monthly? If so, kudos to you on developing a wonderful and wise habit, one which has the potential to really pay off in the future. One of the best ways to achieve and maintain great credit is to monitor your reports and scores closely.

If you do check your credit often then you have probably also become aware of a rather frustrating and puzzling fact when it comes to how your credit card balances appear on your credit reports. Unfortunately, the current balance on your credit card account will generally not line up exactly with the balance which is reflected on your credit reports. Believe it or not, while these mismatched balances can certainly be frustrating, these discrepancies are probably not due to a credit reporting error.

Say Cheese

The balances which are reported by your card issuers to the credit bureaus do not actually represent the real-time activity which takes place on your accounts. In other words, your credit reports will not show an updated balance every time you make a new charge or even when you make a payment. Instead, credit reporting works quite a bit differently.

Your card issuer will actually update the information on your credit reports just once a month. This update occurs shortly after your statement closing date when your card issuer will send a snapshot of your balance and payment information as it is currently reflected on your account at that moment. That snapshot of your balance and other account activity will remain on your credit reports until the information is replaced with a new snapshot the following month.

What Is the Statement Closing Date?

The statement closing date on your credit card account is the date when your bill for the previous month is closed out. It signals the end of your current billing cycle and is also the day when your payment due date is set. Generally the due date will be scheduled for around 25 days after the statement closing date, depending upon your card issuer's policies. If you make any charges after your statement closing date those new charges will be added to the following monthly statement.

It is important to find out your statement closing date from your credit card issuer since this date (or very soon thereafter) is when your balance will be updated with the credit bureaus. Whatever your balance is on your statement closing date (or very soon thereafter) it will remain as such on your credit reports for the next month.

A Zero Balance On Your Credit Reports

Your revolving utilization (aka credit utilization) is a big deal when it comes to your credit scores. Credit scoring models are designed to reward consumers who have zero balances on their credit card accounts. However, even if you pay off your credit cards in full each month (kudos again on a great habit) your credit scores might not be benefiting from that commitment and discipline. 

Here is an example to demonstrate why simply paying your credit card accounts off in full each month may not be enough to earn the great credit scores you desire.

·        Total Credit Card Balance on Statement Closing Date (5th of the Month): $1,500

·        Credit Utilization on Statement Closing Date (5th of the Month): 75% ($1,500 Balance/$2,000 Limit = 75% Utilization Ratio)

·        Date Balance and Utilization Reported to 3 Credit Bureaus: 6th of the Month

·        Date Current Balance Paid In Full: 30th of the Month (Due Date)

·        Balance to Appear on Credit Reports Until 6th of the Following Month: $1,500 (75% Utilized)

In the example above even though the credit card balance was ultimately paid in full on the due date and, therefore, no interest fees were owed, the balance which would show up on the consumer's credit reports would be the one which was accurate on the statement closing date ($1,500 in this case). Since that balance leaves the cardholder heavily utilized (75%), there would almost certainly be a negative impact upon the cardholder's credit scores as a result, even though no late payments were made and even though the balance was actually paid in full by the due date. If the card holder continued to utilize the card and pay it off on the due date each month then this credit-score-damaging cycle would continue to repeat over and over again.

A Better Way to Pay

The good news is that your statement closing date is not a secret and by paying off your balance in full a few days prior to that date your card issuer should report a $0 balance to the credit bureaus on your account. You can typically find your statement closing date on your credit card statement or you can give the card issuer's customer service department a call for this information as well. Once you find out your statement closing date you will simply need to rearrange the date when you pay off your credit card balance each month.

By paying off your credit card balance each month a few days prior to your statement closing date your balance will actually be $0 when your monthly statement is released. As a result, the balance on your credit reports for the following month should be reported as $0 as well.  This wise practice will not only help to save you money which might otherwise be wasted in interest charges, but you will also be setting yourself up for a credit score triumph as well.



Michelle Black is an author and leading credit expert with nearly a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.