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Multiple Applications Used To Cheat Credit Reporting System

A Wired post reported on so-called “credit hacks” that clever consumers were using to legally game the system and manipulate credit reports. These tricks take advantage of the rules and formalized process of the credit reporting system to let hackers manipulate their credit. One such hack dealt with using multiple applications to gain a ton of credit.

One hacker shared that he would generate a massive amount of quick credit by timing simultaneous loan applications from different lenders. Hackers can use this loophole to get dozens of credit cards, have multiple mortgages for a single property, take advantage of special offers to horde cash incentives, or get a large cash loan with zero interest.

This loophole exists, allowing you to apply for several applications and generate multiple hard inquiries within a short span of time. It could take several days for the inquiry to appear on a credit report, so banks don’t notice the parallel applications.

But, this trick won’t ultimately help consumers in the long run:

1. While you could get multiple cards, your credit score will still plummet when all the hard credit inquiries appear on your credit report.
2. If you used this trick to score special offers on credit cards but didn’t need the additional credit, then you are stuck with the cards after you avail of your incentives. If you leave a bunch of cards idle, your issuer may close your cards.
3. An excessive amount of credit may lead you down a road of debt. Using too much available credit will also spike your credit utilization, which will lower your credit score.

Of course, we don’t recommend filing multiple applications because you could potentially, and irrevocably, damage your credit score and be overwhelmed with credit. “Hacking” your way to accessing more credit momentarily may be unnecessary. If you are in need of more credit, a more viable option is to ask and negotiate with your credit card issuer to extend your credit limit. Or pay down your debt to make more credit available to you in the future. That way, you can have a healthy amount of credit — without causing any trouble.

Bottomline: There are credit hacks out there to manipulate your credit report…. but don’t do it! They won’t help your credit score in the long run–only responsible habits and consistency over time makes for healthy credit

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