A rented authorized-user tradeline counts for nothing under B3-5.3-06 and gets flagged by DU under B3-5.3-09. Find it before the underwriter finds it for you.
The buyer paid a website a few hundred dollars. A stranger added them to a card opened in 2009 with a high limit and no late marks. The score moved. The file did not.
Read the tri-merge for four things, in this order. It takes about a minute.
An "authorized user" line with an open date years before any other account on the file.
A surname on that account that does not match the buyer's, and no spouse or co-borrower on the application with that name.
A high limit and a near-zero balance, which is what the sellers rent because it moves utilization.
Recent: added in the last sixty days, usually right after the buyer got a low pre-qual number somewhere else.
Two of the four is a rental. DU will list the creditor and account number in its findings and instruct you to review it. If you cannot document one of Fannie's three doors, another borrower owns it, a spouse owns it, or the buyer has been the sole payer for twelve months with proof, the underwriter reads the file without it.
Sixty no's a week, and this one never needs to be one of them, because it is a no you can see coming.
Say this to the buyer: "That account won't count. We qualify on what's yours." Do not ask them to write a letter of explanation for a card they don't pay on. A false letter is their problem and your origination.
Then send them to Calvin's piece so they understand why the score moved and the file didn't.
If a parent or spouse will add them for real, that works and it documents. If the file is thin, ninety days of a secured card and rent reporting to the right bureau beats any line they can rent, and it closes.
Eight files. Most services check three. The buyer with the rented line usually has a wrong item underneath it: the referral takes twelve minutes.
Sources
- Fannie Mae Selling Guide B3-5.3-06 — Authorized Users of Credit
- Fannie Mae Selling Guide B3-5.3-09 — DU Credit Report Analysis
- Calvin Noman — Someone else's card is not your credit history
Every statutory citation in this article was checked against the source listed before publication. Nothing here is legal advice; if your situation has legal consequences, talk to a licensed attorney in your state.