With Credit Repair and Debt Settlement being two of the fastest growing industries on the internet (possibly the most controversial as well), the FTC has growing concerns about a new form of credit repair.

What they’re concerned about is something called piggy backing. Piggy Backing is where somebody with an established trade line adds somebody else with less then perfect credit as an authorized user to one of their cards that has an excellent payment history.

That cards entire payment history is then transferred to the recipient, which in turn can raise their credit scores artificially.

We’ve been approached several times from merchants of these services to offer their services to our clients. We actually had a meeting about it because it is a way to help improve the recipient’s credit score pretty quickly.

A funny thing happened during the meeting though. When the idea was thrown out there, we all just kind of looked at each other waiting for somebody else to give it the thumbs up or down. In that few seconds of silence we knew we had our answer.

It was not a service we wanted to be involved with!

While it is perfectly legal at this point, something about it doesn’t feel right. We think it’s perfectly acceptable to have a mother or father add a child, or a spouse adding another spouse, but paying a stranger to add you has many potential problems and the FTC agrees.

First of all, my opinion is that either the FTC or the Credit Bureaus will find a way to put a stop to it. My guess is that they will simply discount the points it adds to the recipients credit score all together and that will be the end of that.

Secondly, the fees are outrageous. People with poor credit typically are not in the position to fork over several thousand dollars to have a trade line added for 90 days.

Third, if the person adding you makes a mistake like maxing out his card, making a late pay etc. you’re going to suffer that hit as well.

Credit Repair and Debt settlement are two industries you have to be very careful about. There are a lot of scam artists out there preying on desperate people. While we are not saying this new industry is a scam, but that little voice is telling me to stay away.

We all know about that little voice – it is rarely wrong.

Fixing and rebuilding credit is not as tough as it may seem. With a good plan, a little common sense and some self control, you may find perfect credit is a very realistic goal no matter what your current situation.