Quick Credit Fixes Can Be Risky

Shoring up your shabby credit score could be as easy as turning to eBay(EBAY Quote).

Sensing opportunity amid the distressed housing market, some companies are now offering borrowers quick ways to mend their credit scores. The companies promise to vastly lower loan costs by letting borrowers piggyback on the good credit of others.

The cost for such services starts in the hundreds of dollars and can reach into the thousands.

Credit scores are vitally important numbers, helping determine whether people qualify for loans, and if so, how high their interest rates will be. A good credit score can mean big savings -- so it's tempting for borrowers in need of refinancing to look into this option.

On eBay, consumers can find credit-repair companies like Platinum Marketing. Or cash-strapped borrowers could talk with companies like San Diego-based TradeLine Solutions, Clearwater, Fla.-based Instant Credit Builders and Little Rock-based Seasoned Trade Lines, which also offer ways to prop up credit scores.

The new players aim to fill a niche with innovative -- but legally questionable -- techniques such as promising to repair a score within days, which can vastly lower the cost of borrowing money. In some cases the tactics could make borrowing a possibility where it wasn't before.

A big reason for the surge in firms offering help with credit scores is the wide range of mortgages made to customers with shaky borrowing histories, so-called subprime loans. Many experts say some of those loans should never have been approved in the first place. Mortgage payments that started with lower teaser interest rates, or even interest-only payments, are now beginning to reset, sending housing payments skyward. That increases the risk of foreclosure and may make people more likely to grasp at straws as they search for ways to keep their homes.