This has to be the first great scam of the new millennium. It's called Seasoned Trade Lines. The premise is simple. You have great credit. Others have lousy credit. If they could just "borrow" your good credit for 60 days -- by becoming an authorized user on your credit card -- then they could apply for a mortgage and pay a lower rate, based on your good credit.

This column should end right here. The risks are obvious. You would rightly hesitate to add your own son or daughter as a co-signer on your credit card. After all, if their credit is good, they can easily get their own low-interest-rate card. And if their credit is bad, then they probably shouldn't be borrowing at all. Why on earth would you add a complete stranger as a co-signer on your credit?

The companies that promote this concept of "seasoned trade lines" call it an "honest credit boost." For a fee, they'll match you up with someone else's credit. Of course the deadbeat never personally meets the sterling credit risk. It's not really like a dating service. Rather, it's sort of a "credit sperm bank" -- a brief, impersonal encounter with long-lasting results!

The appeal to the person with terrible credit is obvious. The Web sites of the companies that promote this dubious product proclaim that they can, in less than 90 days, raise your credit score by more than 200 points! That will allow you to easily "buy a new home or take the vacation of your dreams." All of these "lines" are guaranteed to come from people with credit scores above the 700 level. They promise that once your credit score has been "improved" because you've borrowed someone else's good credit history, "you'll pay lower rates and can borrow more."

I can see how desperate people with bad credit would be willing to try this gambit -- even though it comes at a steep cost. Oh yes, to get attached to someone with good seasoned credit, it will cost Mr. Desperate anywhere from $700 to $2,000 -- up front -- depending on the size of the credit line you access. Then again, as one Web site claims: "A higher credit score is priceless!"

But what could possibly be the appeal to someone with good credit -- and thus presumably with a working set of brains? As P.T. Barnum said, "There's a sucker born every minute!"

The online advertisements promise that people with good credit can "Earn up to $10,000 a month or MORE." For each additional authorized user on your card, you'll be paid about $100 to $150. They won't tell you exactly how much until they "see your credit."

In case the math escapes you, if you decide to sign up for this insane idea of "sharing your good credit," you're not getting paid nearly as much as the company collects from the deadbeat who wants to borrow your credit. The difference is the huge profit these matchmakers get.

Matching desperate borrowers and greedy cardholders could be a big business. One site brags that it has over $1 million in "aged credit accounts" -- just waiting to add you as a user. Click on the link for "credit investors" (those with credit to spare) and they remind you that many cards will let you have at least 10 additional signers, and some card issuer allow 99 people to be authorized users.

But what happens if the deadbeat actually charges on your credit card and then doesn't make the payments? The first salesperson I spoke with told me that they never give the deadbeat your full credit card number. Sure, but what happens when it shows up on their credit report, now that they're an "authorized user"? What's to keep them from calling the card issuer and asking for a replacement card?

Steven deJesus, the president of one of companies whose ads are the most ubiquitous, concedes that "you bear all the risk of any unauthorized charges." Since his Montana-registered, Florida-based company started offering this "investment opportunity" in October 2005, it has attracted 38 "investors" (credit sharers) and more than 300 people who have been added as additional authorized users. He says he's had no complaints -- so far.

Of course, deJesus declares, if something goes wrong, you could always sue him. He continually uses the term "credit investors" for those who offer use of their credit, but he says he doesn't have to be registered in any way to conduct his business. And he and others with the same concept pay to have their ads pop up frequently on Google and Yahoo!.

At the bottom of one these Web sites, in huge bold type, it says : "We Want You to Achieve the American Dream." What these companies are really creating is the American Nightmare for those who use their good credit to "help" a desperate stranger. And that's The Savage Truth.
Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated, and she released her fourth book, The Savage Number: How Much Money Do You Need? in June 2005. Savage was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. A Phi Beta Kappa graduate of the University of Michigan, Savage currently serves as a director of the Chicago Mercantile Exchange Corp. She also has served on the boards of McDonald's and Pennzoil.

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