Tuesday, September 6, 2011
Don’t expect to be able to take advantage of this tactic forever though. The Fair Isaac Company is on to the ‘instant credit repair’ scheme and intends to update its credit scoring methods within the year to take such ‘cheating’ into account.
And don’t assume because the current practices are not specifically illegal, that they are perfectly legal and legitimate. “What I've gathered from attorneys here is that it appears to be legal” technically, Federal Trade Commission (FTC) spokesman Frank Dorman has said. “However, the agency is not saying that it is legal.”
The use of borrowed credit makes lenders very nervous as it makes it harder to tell who has actually maintained a good credit record and who has simply bought their way into excellent credit. This dilemma makes their risk-evaluation methods less effective. Plus, using borrowed credit without disclosure to your lender may be considered mortgage fraud. As Ginny Ferguson, credit expert for the National Association of Mortgage Brokers recently said, “These [instant credit repair] companies are encouraging consumers to commit fraud. On a standard home loan, there's a clause that says the consumer is not omitting pertinent facts that could impact his or her ability to repay the loan,” Ferguson said.
So before you dive into one of these ‘instant credit repair’ schemes, consider carefully the dangers of buying into a quick credit fix with ‘borrowed’ credit.
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Roadmap to a Higher Credit Score: http://firstcapitalmtg.blogspot.com/2011/08/dispute-any-information-that-brings.html