Buzz
Dreaming of a higher credit score? Be cautious of scammers who promise quick fixes to your credit problems.
The Federal Trade Commission has reached a settlement with BoostMyScore.net, a credit repair company. This serves as a reminder to be wary of anyone who promises a drastic improvement in your credit score.
As per the complaint, BoostMyScore.net charged clients between $325 and $4,000, claiming it could enhance their credit. It alleged to achieve this by ‘piggybacking’ on others’ credit cards, making those with poor credit authorized users on accounts with excellent credit.
The company claimed that ‘credit piggybacking’ typically provides a credit score boost of over 100 points for BoostMyScore clients, according to promotional materials referenced by the FTC. On average, customers see a 120-point increase within a month or two.
BoostMyScore allowed individuals with high credit scores to profit by renting out their authorized user slots to those looking to improve their scores.
This company is facing legal trouble for charging consumers upfront for credit repair services, which is prohibited under the Credit Repair Organizations Act (CROA).
A credit repair company cannot charge for services before fulfilling its promises. If it demands a monthly fee, the CFPB cautions that this might be an attempt to bypass the CROA, though it remains illegal.
If you’ve signed up for credit repair services, you have three business days to cancel the contract. This applies whether you’re skeptical of their practices or simply change your mind.
Being an authorized user can be a legitimate way to improve or establish your credit, but it comes with risks when you don’t know the other person’s financial situation well (such as a family member). While it’s not illegal to pay someone to add you as an authorized user on their credit card—or vice versa—it’s often seen as a questionable practice.
If you plan to boost your score by linking to someone else’s credit account, make sure it’s with someone you trust who has a solid credit history. Ideally, they should have a longer credit history than you, which can help increase the average age of your accounts and improve your credit score.
While becoming an authorized user might help increase your score, there are no guarantees regarding the exact amount of improvement you’ll see.
