“Seasoned” credit repair can help, but is illegal in certain circumstances

The airwaves are constantly flooded with companies that tell you that they can “fix” or “repair” your bad or damaged credit. For the most part, this is an out and out lie; if your credit report contains factual information, there is no way to remove it. It is there until you either fix it by paying your bills or until seven years goes buy. But for people who have a credit score that is just a bit too low to allow them to qualify for a loan, there is another trick that works, called credit enhancement.

This technique, for which companies often charge several thousand dollars, involves attaching your poor credit to someone with a good credit history. This is done by placing your name as a cosigner on a credit card account of the person with good credit. You don’t have to use the card, or even have access to it, in order to benefit from that person’s good credit. All you have to do is sit there for a few months while Mr. Good Credit uses his cards and (presumably) pays his bills. Within two or three months, his good credit will trickle down to you and your credit score will increase. Increases of as much as two hundred points are not unknown, although most increases are much smaller. For those who are on the margins of good credit, this technique could help.

The system works because some credit card companies permit as many as one hundred cosigners on an account. This allows the companies that do this to recruit people with good credit for this purpose. The companies charge several thousand dollars for the service and they share the money with the providers of good credit.

This technique is completely legal. After all, the credit card companies do allow cosigners on their cards. It should be pointed out, however, that making use of this technique is illegal if you are doing it for the purpose of fraud. If you have applied for a home loan and have been denied and then you use this tactic to qualify for it, you may be committing fraud. Simply being a cosigner on someone else’s card is not illegal, however.

If you happen to know someone who has good credit who is willing to allow you to sign on as a cosigner, you may be able to increase your score rather quickly, provided that you are not doing so for the purpose of applying for a loan for which you would otherwise qualify. If you can find someone, a friend or relative, for instance, who will let you do this, the cost is free. The results are quite fast and quite noteworthy. In time, the credit bureaus will change their scoring system in order to eliminate the score increase that being a cosigner provides, but for now, adding your name to someone else’s account adds a fast and significant boost to your credit score.

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