Read it here first: Borrowing FICO Scores

Monday, June 04, 2007 | 10:30 AM

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Back in April, we discussed the unusual lending-related practice of "borrowing" someone else's credit-worthiness. (Go FICO Yourself: Selling Your Credit Score).

Now, the mainstream media has finally gotten around to discovering this less-than-savory part of the lending laws.

Here's a quick excerpt:

"Only a low credit score stood between Alipio Estruch and a mortgage to buy a $449,000 Spanish-style house in Weston, Fla., a few miles west of Fort Lauderdale.

Instead of spending several years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

The result was a happy ending for Estruch, but the growing practice is sending shivers through the mortgage industry. Federal regulators are also reviewing the practice. And after being contacted by The Associated Press for this story, Fair Isaac Corp., the developer of the widely used FICO score, said it will change its credit scoring system beginning later this year in a way it contends will end this little-known but potentially high-impact mortgage loan loophole.

Instantcreditbuilders.com, or ICB, helped Estruch boost his score by arranging for him to be added as an authorized user on several credit cards of people with stellar credit who were paid to allow this coattailing. Parents also use this practice when they add their children to their credit cards to help them build solid credit.

The pitch to those who are essentially renting their credit history for pay is seductive: You don't need to worry about users of this service receiving duplicate copies of your credit cards, account numbers or any of your personal information. It's essentially free money, they are told."

The entire article is worth the read . . .



>

Source:
'Piggybacking' Roils Credit Industry
J.W. Elphinstone
AP, Sunday June 3, 6:57 pm ET
http://biz.yahoo.com/ap/070603/cash_for_credit.html?.v=13

Monday, June 04, 2007 | 10:30 AM | Permalink | Comments (9) | TrackBack (0)
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Comments

Sounds alot like the financial aid problems of the early 80's. You had waves of foreigners coming here to go to school and the only way to get financial aid was to have a social security number.

Waves of people went to school on another person's SS# as there was no way of really confirming if the person was who they said the were. (remember pre-internet and actual ethics and morality were a bit more prevalent)

The SS# has now been replaced with the G.I. Bill as schools play the game to acquire more students and their precious gov't money. There is wholesale abuse in the financial aid sector as well as the mortgage business.

i could tell you stories about Master's Institute, Micro Skills, and other post-secondary schools that are largely funded by the G.I. Bill payments.

Ciao
MS

Posted by: michael schumacher | Jun 4, 2007 11:15:11 AM

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