The Minneapolis Star Tribune recently ran an article on home buyers who try to improve their credit rating by adding those with shaky credit histories to credit cards belonging to people with good credit ratings.
Apparently there are businesses out there that specialize in providing this service. They claim that they can raise your credit score by 50-250 points. Legally you can add people to your credit cards; typically you might see this in a family situation where you might give a son or daughter a credit card to use in emergency situations. There are no laws prohibiting this – or by extension prohibiting a person with good credit from sharing with anyone.
People with low credit ratings are paying up to $1500 for this quick credit boost; the people with good credit are making a few hundred dollars and the rest goes to the intermediary company.
The Federal Trade Commission is aware of this practice and apparently looking into it but at this point it is legal. The big issue here is potential for mortgage fraud or at the very least people getting into mortgages tat they really can’t afford.