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Credit Score Scam on the Rise

By Sally Maison
Published: Sunday, November 8th, 2009

Consumers know how important it is to have a good credit score. But with the recession still weighing heavily on the shoulders of Kansan consumers, some residents who are not able to achieve a good rating through honest means are cheating their way to it.

Credit Score Scam on the RiseCredit score scam has been going on for years, but it has not been until lately that Kansas City saw the rise in the number of consumers with poor credit present better ratings to lenders. The increase was so dramatic, it immediately drew the attention of the federal prosecutor’s office.

According to Gene Porter, Chief of Fraud and Corruption Unit in the US Attorney’s office in Kansas City, a person with a low credit score often buys a good rating from someone else.

If people transact with cash all the time, having a good credit score would not be necessary. Since Americans live a credit-based lifestyle, obtaining an excellent rating means everything. Some consumers who are struggling with their credit score are able to get a loan by renting, buying, or using another person’s good rating.

Porter said the number of people engaging in the practice has been multiplying lately. She narrated that some people buy another person’s good credit score to qualify for a loan, get the money, take it out, and do not bother to pay it back. They use the funds they get and just let their loans slip into default, she added.

Experts say with the markets already shaky, creditors cannot take many such frauds. Authorities have so far recorded $11 million worth of fraudulently acquired mortgages in the western portions of the state alone, totaling to $5 million in losses.

Investigators note that some people are aware the possible abuses but are still letting it happen deliberately. Nonetheless, records by federal authorities reveal that the practice is still going on.
Specialists warn consumers about selling their good credit score to someone who might misuse it, telling consumers that such practice will eventually take its toll on their ratings.

A few years ago, authorities recorded two instances of fraud but the numbers have been cropping up lately in Kansas City with the collapse in the financial market.

Analysts explain that with landlords, insurance companies, and banks using credit score to determine the creditworthiness of consumers, it is not hard to see why people are going desperate about getting a better rating.

But they tell consumers that there are still many ways to improve their rating without resorting to fraudulent activities. While they do not have a good credit score yet, consumers are advised to delay loans and to live below their means.

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