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A seasoned tradeline is a line of credit that the borrower has held open in good standing for a long period of time, typically at least 2 years. The "seasoned" part simply implies that the account is aged or that it has an established history.
The creditworthy borrower adds the third party as an authorized user of his lines of credit, but does not actually provide the third party with materials credit cards, account numbers, etc.
The benefit to the third party is an improvement in their personal credit rating—their credit score increases. However, this does not change their entire credit record, but merely increases their credit score as a result of the newly added tradeline. This may make the third party look like a better credit risk, and may improve the third party's access to new credit. However, a credit score is only one aspect of the lending process; that is, the borrower must pass all underwriting procedures, which include much more than the credit scores of the borrower.
There is no cut and dried answer regarding the many questions surrounding the legality of piggybacking, however, there are many sources that tend to indicate perhaps a general answer, such as:. The Fair Issac Co estimates there are approximately 50 million consumers who re-added as authorized users on other peoples accounts. While the legality of piggybacking tradelines seems to remain ambiguous, there is a potential clear violation of federal law, if for example, a piggybacking company takes up front fees from their clients.
While this is indeed much stricter, it appears to allow for up front fees if the company is bonded and uses a trust account. For example, Section The risk to the "donor" is that the other person might actually make charges against the account, and not pay it back. The brokers who provide this service claim that they do not reveal the entire account number to the recipient, or do not themselves have access to the account number. It is possible a recipient might learn the account number in some other way, for example if it appears on his own credit report.
However, this is often insufficient information to make use of the account - a PIN , expiration date, or security code is typically also required. These measures further lower the risk to the "donor". With an authorized user account the credit report clearly marks the account as authorized user; with this new practice, however, the lender is not alerted to the true status of the account history.
Authorized user accounts are legal and will be included into credit scoring; it's a violation of Federal law to not include ALL information in a credit file while calculating a credit score. While primarily discussing credit repair, the Federal Trade Commission has written facts for consumers to assist them in avoiding scams. Credit Where None is Due? From Wikipedia, the free encyclopedia. This article is written like a personal reflection or opinion essay that states a Wikipedia editor's personal feelings about a topic.
Please help improve it by rewriting it in an encyclopedic style. December Learn how and when to remove this template message. Archived from the original on December 22, Retrieved December 8, How to Help Yourself Consumer Information". Retrieved from " https: Wikipedia articles needing style editing from December All articles needing style editing.