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Oxford Loan Funding

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Business Loan Funding Center; A Division of Affiliate Information Technology

Opponent's Views

Those who oppose the concept of piggybacking would suggest that:

  • If the third party is dealing with a lender who uses  risk-based pricing , then their artificially inflated credit score may translate into a substantially lower  interest rate .
  • Artificially modifying credit scores may be consider fraudulent.
  • It's one thing to add a friend or a relative, it's another to add a stranger for profit.

Proponent's views

Those who support the concept of piggybacking would suggest, in response:

  • Risk-based pricing, relying solely on credit scores, does not truly get at the fundamental "risk" of the applicant. So, the access to lower interest rates is not affected entirely by piggybacking.
  • Credit scores are already artificially modified; that is, it is a made up system. There is no difference between adding an authorized user tradeline and opening a new account; they both affect your credit score.
  • Federal law, specifically the  Equal Credit Opportunity Act , provides for the addition of authorized user tradeline, without regard for the relationship between the parties.

Business Model

  1. A company offering the piggybacking service maintains a network of creditworthy "card holders" or "vendors", those stand by ready to add strangers to their accounts as authorized users for a fee.
  2. A third party, looking to increase their credit score, contacts the company. The company offers a selected tradeline to the client and charges the client a fee per account.
  3. The client pays the fee (anywhere from $500.00 to $2,000.00 per tradeline).
  4. The company submits the order to the card holder.
  5. Once the tradeline reports, the company pays the card holder their fee (anywhere from $50.00 to $250.00 per authorized user) and the company keeps the remain funds as profit, minus their expenses, of course.


There is no cut and dry answer regarding the many questions surrounding the legality of piggybacking, however, there are many sources that tend to indicate perhaps a general answer, such as:

  • FTC spokesman Frank Dorman said: "What I've gathered from attorneys here is that it is legal , however, the agency is not saying that it is legal technically." [ 1 ]  Other law enforcement agencies, like the Florida Attorney General's Office, are reviewing whether such activities are legal. [ 2 ]
  • A report published by the Federal Reserve Board reported "This is possible because creditors generally have followed a practice of furnishing to credit bureaus information about all authorized users, whether or not the authorized user is a spouse, without indicating which authorized users are spouses and which are not. This practice does not violate Reg. B"  [ 3 ]
  • In a written statement from Fair Isaac Corporation on credit scoring models and credit score before the U.S. House of Representatives Committee on Financial Services, Subcommittee on Oversight and Investigations, Tom Quinn, Vice President of Global Scoring Solutions for Fair Isaac Corporation, stated: "After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user trade lines present on the credit report..." [ 4 ]

Tradeline Scams

While primarily discussing credit repair, the  Federal Trade Commission  has written facts for consumers to assist them in avoiding scams. [ 7 ]

Some key components of these consumer facts suggest that you should:

  1. Ensure the company actually exists; check state government records.
  2. Ensure the company does not have serious and unresolved complaints against it.
  3. Ensure you receive a contract from the company.
  4. Ensure the contract contains your rights under federal law.
  5. Ensure you are buying Authorized User Accounts; theses are the ONLY accounts under law used by the major banks which will in fact report to your credit report.
  6. Ensure to AVOID persons or companies claiming to sell Primary User Accounts; not only has our research shown these claims to be extremely false 99% of the time; by definition a fraudulent Primary User Account, being added to a non-primary user account; by definition is Fraud! 
  7. Ensure you have many forms of contact for the company you choose and ensure they have many years of service, networks, affiliates actively selling their services and your contract protects you the client.

Piggybacking" Tradelines

"Piggybacking" Tradelines is a practice involving seasoned trade lines, sometimes called piggybacking, which uses a creditworthy borrower's accounts to improve the  credit rating  of an unrelated third party.

The creditworthy borrower adds the third party as an authorized user of his lines of credit, but does not actually provide the third party with materials (credit cards, account numbers, etc.) that would permit the third party to make charges against that account.

The benefit to the third party is an improvement in their personal credit rating—their  credit score  increases. However, this does not change their entire credit record, but merely increases their credit score as a result of the newly added tradeline. This may make the third party look like a better credit risk, and may improve the third party's access to new credit. However, a credit score is only one aspect of the lending process; that is, the borrow must pass all underwriting procedures, which include much more than the credit scores of the borrow.