Is this legal?

[Anonymous]

So I am trying to buy a home and my lender tells me I don't have enough credit and need to build my credit score up. He states that I can "pay" to be added as an authorized user to someone's account which would boost my credit score up really fast. He then forwards me the email with the information of people random people that I can be added to.  And it's like a $1,000!! I am not going to do it. I am going to ask my dad to add me to his  but I don't want to deal with this lender if he is in to this illegal stuff.  

[Anonymous]

I have never heard of a loan officer so brazenly promoting this kind of thing (and with email trail that traces back to him!). He's right that it is possible to do.  I am curious to hear what other loan officers who might frequent this room know about how common it s for people working in the industry to recommend purchasing an AU from a stranger.  FICO considers this "abuse" of AU status.

How old is your dad's card?  You should be looking for a spouse or roommate or parent who has a card that is old, clean, and with a very low or $0 balance.  That's the kind of card to which you would want to be added to as an AU.

[me12345]

I would "Run" from that lender AND file a complaint with the CFPB (Google it, there is a Complaint link on the website)  what he is asking you to do is illegal and unethical....you could invest a lot of time and money to find out at the last minute that your deal wont close.

Thanks,

[Anonymous]

Thnaks guys!

I knew something was off. 

[StartingOver10]

Agree with the prior posters....run away from this lender. Sounds like mortgage fraud to me. 

Get with a legitimate lender. Work on your credit too. If you follow the advice in the Rebuillding Forum, you will see an increase in your scores.  AU's are okay - with family members and with their permission. Plus you don't have to pay them! You want a TL that is clean and with a very low balance. 

Of course, it is better if you don't need an AU account at all.

[Anonymous]

It seems like he has a side business going on.  I don't think being added as an authorized user on someone's account with good credit work anymore.  AMEX use to back date accounts and they stopped a while ago.  It use to be if you are added to an AMEX member's account you get the same member since date.  If the member since date was 10 years ago your score increases due to the AAoA increasing.   That practice has stopped.

[Anonymous]

It all depends on the CC issuer.  Many CC issuers still report the "Date Opened" of an AU to be whatever the date was when the card holder originally opened it.  (Thus if the card was originally opened 20 years ago, then the AU gets a tradeline with a Date Opened of 20 years ago.) 

But as you say some issuers make the AU's "Date Opened" to be the date that the AU was added -- which of course makes the "get added as an AU to a very old card" strategy worthless.

Lots of people use the AU strategy, especially if they are aiming for a mortgage, since the (very old) FICO mortgage models count AU tradelines fully.  You just have to find a CC issuer that will give you the same date as the original card holder, and there are plenty of those still around.