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I recently learned about selling tradelines. As far as I understand it users with credit cards with long credit histories and large limits sell authorized user positions to people looking to improve their credit score. The authorized user never receives a card, and they are removed from the account after a few months, but in the meantime it helps boost their credit score so they can get a loan at a better rate. My questions are:

1) Is this a scam/legal? It feels like a scam.

2) Why would credit card companies allow this to persist? It seems like it'd be easy to flag anyone who has bad credit and then latches onto someone with good credit for a month.

3) If this is legal is it safe? It seems like the kind of thing that scammers would exploit and somehow end up with a copy of your credit card and make huge purchases on it-- the added insult would be that you wouldn't even be able to contest the charges since they'd be from an authorized user.

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  • In order to improve your credit score by doing this, you would have to send the account holder your SSN. Not worth it in my opinion for a few extra credit points. Feels like a scam to me too.
    – Nosjack
    Commented Dec 31, 2019 at 20:03
  • @Nosjack -- I was mainly interested in selling the tradeline rather than buying it, my credit's excellent.
    – Dugan
    Commented Dec 31, 2019 at 20:06

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Safe? No.

Your 'authorized user' can simply call the credit card company and say he never got the card. They will ask him some personal data for verification (but obviously, he knows his name, address, and SSN), and he can change the delivery address and get a new card mailed, or write down the credit card number and use it online. Then he racks up the limit onto your card, and throws it away.
You will only know when you see the bill, and your choices are to pay off his debt, or default on it and lose your nice credit score.

Why do credit card companies allow this? Because they know they get the money from you, with high probability, so why would they not do it? It's a free lunch for them.

Think about why that person has a low credit score - because he is a nice guy and pays his bills?

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