00:00 Here's your Forbes Daily Briefing for Friday, May 10.
00:05 Today on Forbes, this company wants to rent your credit history.
00:11 When a woman who once bore the title "Financial Applications Product Owner 2" at an insurance
00:16 company starts a TikTok with "This is the sketchiest thing I'm doing to make extra
00:21 money," you might think she's playing it up for drama.
00:26 But Amber Smith, a 27-year-old from Des Moines, Iowa with an MBA, is dead serious.
00:32 She's swapped insurance for the influencer business, focusing her content on reselling
00:36 clothes.
00:37 And she's been picking up $40 here and there with a scheme that sounds pretty shady.
00:43 In the video that has since garnered millions of views across the social media sphere, Smith
00:47 says "I've started selling trade lines on my credit cards.
00:51 Essentially what this is, is if a person has bad credit, but they know that they need to
00:56 get a mortgage or a car loan or something, they pay money to this website."
01:01 The website she's referring to is Trade Line Supply Company, a San Diego-based broker.
01:07 Smith continues, "This website matches them up with me based on what they're looking
01:11 for and I add them as an authorized user to my credit card."
01:15 A trade line, for the uninitiated, is what the credit bureaus, Equifax, Experian, and
01:22 TransUnion, call each credit card account listed on an individual's credit history
01:27 report.
01:28 Algorithms turn the information in credit reports into a credit score, most often a
01:32 FICO score ranging from 300 to 850.
01:36 Incredibly, individuals like Smith with strong credit histories can make money by adding
01:41 total strangers as authorized users on their credit cards.
01:45 These buyers don't actually gain access to the card.
01:47 Instead, they get a trade line, paying for the benefit of the card's favorable characteristics
01:52 — its long account history, high credit limits, and impeccable on-time payment record
01:56 — to appear on their own credit reports.
02:00 The richer the card's history and the larger its credit line, the higher the fee it commands.
02:05 After a few months, the seller removes the buyer from the card and opens up the spot
02:09 for the next customer to piggyback off their sterling credit profile.
02:14 On TradeLineSupply's website recently, a 3-year-old Capital One card with a $5,000
02:20 limit was listed at $322.
02:22 Meanwhile, a 19-year-old Chase card with a $69,700 limit was priced at $1,955 — almost
02:31 as much as the average American household spends on housing each month.
02:35 There appears to be quite a big markup involved.
02:38 Capital influencer Smith says she earned $40 from a sale that TradeLineSupply priced at
02:43 $275.
02:46 Darren Eba, TradeLineSupply's chief operations officer, wouldn't discuss the company's
02:50 revenue or markups, but did take pains to point out that the company isn't promising
02:55 buyers results.
02:56 He says, "Many consumers make the mistake of thinking that trade lines arbitrarily boost
03:01 credit scores.
03:02 However, this is not necessarily true."
03:06 Forbes reached out to two other trade line selling sites — competitors Boost Credit
03:10 101 and Superior Trade Lines — but both didn't respond to requests for comment.
03:16 Despite Eba's disclaimer, TradeLine buyers obviously believe it's a quick and effective
03:20 way to hack their credit scores, getting a temporary boost that might qualify them for
03:24 credit lines and loans — or for lower rates — than they could get otherwise.
03:29 And there's some evidence it can work.
03:32 There are also plenty of critics.
03:34 Beverly Harzog, a credit card expert and the host of Your Personal Economy podcast, says,
03:39 "I don't think this is a good idea for buyers or sellers.
03:43 It's not technically illegal, but whenever you have to say that something isn't technically
03:47 illegal, there's something else wrong with it.
03:50 There's a lot of risk involved.
03:52 You could break the terms and conditions of your credit card.
03:54 You could be helping someone commit fraud."
03:58 For sellers, the main risk is getting their card canceled if the issuer catches wind of
04:02 the trade line selling.
04:04 Then there's the slim chance — albeit a scary one — that a buyer might finagle
04:08 their way into actually charging purchases on the account, even without a physical card.
04:13 They could, in theory, pull some tricks using the details that pop up on their credit report.
04:19 Online chatter suggests it's unlikely, but Amber Smith admits you probably wouldn't
04:23 hear someone confess they got duped like that.
04:26 A blog post on Experian's site suggests TradeLine buyers could be at risk of becoming
04:30 victims of identity theft if the personal information — including social security
04:35 number — they provide to get added as an authorized user is misused.
04:40 The post also raises the specter that a TradeLine buyer applying for a loan or credit card with
04:44 an artificially boosted score could be in danger "of committing bank fraud" by
04:49 falsely representing their creditworthiness to lenders.
04:54 For full coverage, check out Brandon Kokodin's piece on Forbes.com.
04:59 This is Kieran Meadows from Forbes.
05:01 Thanks for tuning in.
05:03 [MUSIC]
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