Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig

[MasterStache]

So how much is everyone making? I got to the game late and only cleared one AU so far, so $75 for me.  Got 2 cards with lots of slots just going unused.

Signed up very early in Jan and got 3 adds in first couple of months for a really old card with a high CL. Essentially nothing since.  I figure even if I season some new(er) cards they won't net me much if anything.

[ditkanate]

I have 4 cards listed with them - first AU added in May.  So from May through now I've made a total of $1525 on 13 AU's scattered over the months.  No complaints really.

[Runner77]

Signed up in late December last year with 2 cards with the new company, I had one sale all year.

[Joel]

Three $75 sales in consecutive months at the start of the year. Nothing since. I removed all my cards earlier this month. Not worth my time to be on demand to add someone combined with the tax complications.

[monarda]

I've had 6 sales since January, on a single old high CL card. Not been paid for the last one yet, but once I do, the 2017 total will be $1200. Our "fun money"  :-)

So far no sales yet on my 2 year old 10K CL card, added in October.

[meatgrinder]

Three $75 sales in consecutive months at the start of the year. Nothing since. I removed all my cards earlier this month. Not worth my time to be on demand to add someone combined with the tax complications.

What are the tax complications?  Aren't tradesales taxed as plain ol' income?

[secondcor521]

Three $75 sales in consecutive months at the start of the year. Nothing since. I removed all my cards earlier this month. Not worth my time to be on demand to add someone combined with the tax complications.

What are the tax complications?  Aren't tradesales taxed as plain ol' income?

If you're using the company mentioned in this thread, you'll get a 1099 for the income which, depending on how you view it, should be reported as gross income on a Schedule C or on line 21 of Form 1040.

Complications-wise, it is one more form to wait for and enter the data from into TurboTax or whatever you use.  It increases AGI, so if you're close to an AGI cliff you need to plan for or accommodate that.  If you enter it on Schedule C, you may also need/want to keep track of business expense deductions against that business income (I certainly would consider any annual fees you pay to be business expenses) and enter that into the appropriate places.  Finally, if you enter it on Schedule C, it will have the side effect of raising your Social Security benefits by probably a miniscule degree when you collect those, which could put you into a higher tax bracket when you're 70.

[meatgrinder]

Three $75 sales in consecutive months at the start of the year. Nothing since. I removed all my cards earlier this month. Not worth my time to be on demand to add someone combined with the tax complications.

What are the tax complications?  Aren't tradesales taxed as plain ol' income?

If you're using the company mentioned in this thread, you'll get a 1099 for the income which, depending on how you view it, should be reported as gross income on a Schedule C or on line 21 of Form 1040.

Complications-wise, it is one more form to wait for and enter the data from into TurboTax or whatever you use.  It increases AGI, so if you're close to an AGI cliff you need to plan for or accommodate that.  If you enter it on Schedule C, you may also need/want to keep track of business expense deductions against that business income (I certainly would consider any annual fees you pay to be business expenses) and enter that into the appropriate places.  Finally, if you enter it on Schedule C, it will have the side effect of raising your Social Security benefits by probably a miniscule degree when you collect those, which could put you into a higher tax bracket when you're 70.

Thanks for the info. Guess we have different interpretations of "complicated".  For AGI cliff/tax brackets, I understand that this income could be taxed at higher marginal rates but still much better than none at all.

[frugalnacho]

Do you regularly charge expenses to cards waiting for a tradeline?  I find I spend to meet sign up bonuses, then after that I go with the best rewards which means several of my cards are totally useless.   Like my 12 year old BoA card that gets 1.5% cash back with no special categories - why would I ever use that card when I have at least 2 cards already that offer 2%?  I'll charge on it as per the guidelines given once I sell a tradeline on it, but not until then.

Do I have any incentive to actually use any of the cards I plan to sell tradelines on?  Are there any other reasons to regularly use a card that offers inferior rewards?

[robartsd]

Are there any other reasons to regularly use a card that offers inferior rewards?

Banks sometimes close accounts that have no activity, so it's probably best to put a token charge on accounts you want to keep active every year or two even if you don't have a TL sale on the card.

[secondcor521]

Do you regularly charge expenses to cards waiting for a tradeline?  I find I spend to meet sign up bonuses, then after that I go with the best rewards which means several of my cards are totally useless.   Like my 12 year old BoA card that gets 1.5% cash back with no special categories - why would I ever use that card when I have at least 2 cards already that offer 2%?  I'll charge on it as per the guidelines given once I sell a tradeline on it, but not until then.

Do I have any incentive to actually use any of the cards I plan to sell tradelines on?  Are there any other reasons to regularly use a card that offers inferior rewards?

I don't.  My CC-able spending is so low (about $25K annually) that I just use my Chase CSR for everything and don't bother optimizing past that point.

I have reminders for each card each month a few days after the statement close date.  When those reminders pop, I check if the card has any AUs; if they do, I charge a small amount on that card.  (I think ARS only ensures that there is a charge on there the first month per AU and has reported success that way.  My approach is more conservative and is more effort and also works.)

The only reasons I know of to use cards with inferior rewards is (A) to ensure that the CC company doesn't close the account for lack of activity.  This is uncommon but does happen; charging once a year is probably sufficient for this.  (B) If you want to ask for a waiver of an annual fee or a CL increase, I believe the CC companies consider average monthly usage in both those cases.  But to succeed in this regard, you probably want to put several thousand per month on a card to get an annual fee waiver or a significant portion of the CL in order to get a CL increase.

Beyond those few reasons, I think the churn and burn strategy is overall optimal.  Annually I get new cards with signup bonuses, MS and regular spend until I get the bonus, sockdrawer them, then downgrade to avoid annual fees.  Note that after several years this gets harder to do because of things like Chase's 5/24 rule, lifetime or 2-year exclusions on getting multiple bonuses on the same card, and having a credit report that lists multiple dozens of credit cards.

[frozen]

I am curious what people think about this Reddit post that describes "Bust-out" scores, creation of "synthetic identities" and cautions against adding unknown authorized users to your accounts:
https://www.reddit.com/r/churning/comments/7jla34/card_shutdowns_and_bustout_score_risk_factors/

This part of the author's post is especially pertinent to the tradeline sales industry:

"I want to add one final caution. The KEY method used in creating synthetic identities for large-scale bust-out fraud is associating the synthetic identity with a real person with a long and established tradeline by adding the synthetic identity as an Authorized User. You should NEVER allow your identity to be linked to someone you do not know through a process such as selling access to a tradeline to a supposed credit repair firm. This has a very high likelihood of linking you a synthetic identity and could pose enormous risks in the future as these webs of fraud are ferreted out using analytical techniques to discover these links."

[arebelspy]

I am curious what people think about this Reddit post that describes "Bust-out" scores, creation of "synthetic identities" and cautions against adding unknown authorized users to your accounts:
https://www.reddit.com/r/churning/comments/7jla34/card_shutdowns_and_bustout_score_risk_factors/

This part of the author's post is especially pertinent to the tradeline sales industry:

"I want to add one final caution. The KEY method used in creating synthetic identities for large-scale bust-out fraud is associating the synthetic identity with a real person with a long and established tradeline by adding the synthetic identity as an Authorized User. You should NEVER allow your identity to be linked to someone you do not know through a process such as selling access to a tradeline to a supposed credit repair firm. This has a very high likelihood of linking you a synthetic identity and could pose enormous risks in the future as these webs of fraud are ferreted out using analytical techniques to discover these links."

Oh yes, totally.

This is why it's important to use a good tradeline company. Who verifies their authorized users through actual, in-depth, comprehensive methods.

Fraud is a huge concern. And one most TL companies don't give a crap about, because they can make money allowing anyone to buy TLs.

There's a reason why I've researched 15+ tradeline companies (and narrowed from there to a handful to research in-depth, including talking to the owners of a half-dozen) and can only recommend two.

I think people using other tradeline companies who don't utilize the best (and yes, expensive--we're talking at least $20-$30 per AU, which cuts into profit margins, and why bad companies don't want to do it, along with the effort involved) methods for AU quality control are being foolish.

It's not worth linking to that type of activity for a few hundred bucks. Helping actual people improve their credit scores? Awesome! Possibly adding synthetic identities, or an identity that has been stolen, or someone being manipulated? Terrible, and so not worth it.

It's an industry fraught with risks. So who you use is crucial. I don't research these companies for my own amusement. :)

I'd rather have a few sales from a good company than trying to get more from a bad one, and getting shut down very quickly, and being tied to fraud and risking liability there.

[JohnGalt79]

If you're using the company mentioned in this thread, you'll get a 1099 for the income which, depending on how you view it, should be reported as gross income on a Schedule C or on line 21 of Form 1040.

...  If you enter it on Schedule C, you may also need/want to keep track of business expense deductions against that business income (I certainly would consider any annual fees you pay to be business expenses) and enter that into the appropriate places.

Can you guys help me understand - what are the pros & cons of reporting this tradeline income on Schedule C vs line 21 of Form 1040?

And, what would determine whether it is reported in Schedule C versus line 21 on Form 1040?

(I have very little experience with non-W2 income, so thanks!)

[tj]

If you're using the company mentioned in this thread, you'll get a 1099 for the income which, depending on how you view it, should be reported as gross income on a Schedule C or on line 21 of Form 1040.

...  If you enter it on Schedule C, you may also need/want to keep track of business expense deductions against that business income (I certainly would consider any annual fees you pay to be business expenses) and enter that into the appropriate places.

Can you guys help me understand - what are the pros & cons of reporting this tradeline income on Schedule C vs line 21 of Form 1040?

And, what would determine whether it is reported in Schedule C versus line 21 on Form 1040?

(I have very little experience with non-W2 income, so thanks!)

Whichever you do, I don't think you can get out of paying FICA taxes. As long as the taxes due are the same, don't think the IRS cares. I've been inconsistent with similar such income - but the taxes due is exactly the same so long as you have no business expenses to offset it, which obviously wouldn't be possible to account for on line 21.

[CanuckExpat]

Can you guys help me understand - what are the pros & cons of reporting this tradeline income on Schedule C vs line 21 of Form 1040?

And, what would determine whether it is reported in Schedule C versus line 21 on Form 1040?

(I have very little experience with non-W2 income, so thanks!)

Discussed in more detail on breakout thread: Small Business and Miscellaneous Income Best Practices

Breaks down to ease of filing vs. do you want to deduct business expenses, shelter some income in SEP IRA, solo 401k, etc

Also, you can "get out" of FICA if
a) You have other source of income (like job) that puts you over SS threshold
b) You can use S Corp to split income between salary and investment income, but almost certainly overkill for this, unless you have A LOT of sales

[JohnGalt79]

Can you guys help me understand - what are the pros & cons of reporting this tradeline income on Schedule C vs line 21 of Form 1040?

And, what would determine whether it is reported in Schedule C versus line 21 on Form 1040?

(I have very little experience with non-W2 income, so thanks!)

Discussed in more detail on breakout thread: Small Business and Miscellaneous Income Best Practices

Breaks down to ease of filing vs. do you want to deduct business expenses, shelter some income in SEP IRA, solo 401k, etc

Also, you can "get out" of FICA if
a) You have other source of income (like job) that puts you over SS threshold
b) You can use S Corp to split income between salary and investment income, but almost certainly overkill for this, unless you have A LOT of sales

Great, thanks.  That breakout thread is very helpful.

[tj]

a) You have other source of income (like job) that puts you over SS threshold

IIRC, Social security has a cap but medicare does not.

[Padonak]

Quick question.

When a potential buyer selects a tradeline with a tradeline company, are they able to see the name of the seller before they decide to buy? If so, is it the full name or just the first name with initial?  How does it work with the "old" and "new" tradeline companies, any differences?

If buyers can see the name, especially the full name, i have two concerns:
-Privacy (self explanatory).
-For those who have foreign names, some buyers may choose another tradeline because of that, e.g. the name Bill Jones appears more trustworthy than Mohammed iShaq (both are made up names).

[secondcor521]

Quick question.

When a potential buyer selects a tradeline with a tradeline company, are they able to see the name of the seller before they decide to buy? If so, is it the full name or just the first name with initial?  How does it work with the "old" and "new" tradeline companies, any differences?

If buyers can see the name, especially the full name, i have two concerns:
-Privacy (self explanatory).
-For those who have foreign names, some buyers may choose another tradeline because of that, e.g. the name Bill Jones appears more trustworthy than Mohammed iShaq (both are made up names).

I don't think the buyer sees the seller's name at all.  I suspect that all the buyer sees is CC issuer, CL, and age.  So "Barclays $25K 10 years" or whatever.

[redslaundry]

Reading through the thread, it looks like there have been a few scattered mentions of peopling getting mail (usually junk mail) for their tradeline clients. I was wondering if anyone has noticed getting (junk) mail for clients on specific tradelines only.  I ask because that is what has happened to me and I was wondering if anyone had any insight or similar experiences.

I've been with the Old co for a few years and I have never gotten any mail or phone calls for any of my tradeline clients. However, last year I signed up my USAA card with the new co. Since then, I've gotten lots of junk mail and phone calls from various entities trying to reach my tradeline clients on the USAA card.

My theory is that USAA is more "aggressive" in selling information about authorized users. However, that doesn't fully make sense to me. Why would USAA be selling information on authorized users, but other banks not sell that information? USAA has a reputation for treating their members "fairly" so why would a bank like that sell information but the other banks not?

If anyone has any ideas/speculation/similar experiences, I'd like to hear about it.


**Please Note: I don't think the situation I described has anything to do with New Co vs. Old Co. I have a non-USAA card with new co and I haven't gotten any junk mail for clients I put on that tradeline which suggests the issue may be related to USAA**

[Car Jack]

I think you've figured it out and if you asked USAA, they'd probably tell you that these companies that they sell your information to provide services that you potentially might want to take advantage of.  You can probably "opt out" of their marketing to reduce junk mail.

[Davin]

I am posting to follow this thread. It looks like I missed the boom, but it still should be worth the minimal effort to try.

[dakota5176]

I had my first sale in July and have made $1100.00 so far, however not with the company mentioned in this thread.  A member here recommended me a different company and things have gone well.  I did sign up with the company mentioned here but only have had two AUs and have not been paid for either.  Both were at the beginning of October so I am starting to get nervous, the other company seems to pay faster.

I have since taken out some other cards to season and hope to do better in the future. 

[hgjjgkj]

I have had multiple adds since October with the new company but last night I realized i have not been paid for anything since October. I have been paid for adds in months prior. I reached out and was informed the accounting person is on vacation. Seems reasonable but I plan to stay on these guys until it gets right. This company is very sloppy in a lot of ways it seems

[monarda]

I did a late October add and haven't been paid yet. Then I looked at a recent email where it says I should be expected to be paid in early January according to their schedule. So I guess be patient. I've found them to be on schedule for all my other adds.

[boarder42]

Email them and they take care of you quickly

[abamford]

I will pile on and also let everyone know that this company has not paid on time for any of the four adds I have made.  I have had to HOUND these people for my money each time.  I was paid VERY late for the first two adds and I am still waiting to be paid for my last two adds, which posted on 11/9.  I received an email from Cliff on 12/12 stating I would be paid in late December yet here we are on the last business day of the month and no deposits have been made.  Once I receive the funds I am owed for the last two adds, I am done doing business with this company and I will be seeking a new tradeline company to work with.  Also, this may be a coincidence because I cannot verify, but once I started calling and emailing looking for the money I was owed, the company stopped sending adds my way.  For anyone looking to become a supplier for a tradeline company, I would not recommend this one based on my experience so far. 

[hgjjgkj]

Bittersweet to know I am not the only one. i have talked to these guys extensively about many things during my 4 months of doing business with them. I think they mean well but something in their process must be very manual or HIGHLY disorganized.  They said the guy was on vacation. I will be all over them next week.

[sol]

I was also consistently not paid on time, and our email probing to find out why coincided with not getting any more adds ever again.  Maybe a coincidence?  Maybe not.

I mean, I kind of understand.  They have lots of cards to pick from, and they don't want to deal with squeaky wheels.  They want everyone to make money, and everyone to be happy, and all of their cardholders to happily recommend them to other cardholders (like on the forum).  If you piss off the management, why would they go out of their way to help you, or sell your lines for you?  They have lots of other people they can use, people who don't complain about a missed payment here and there.  We are an expendable resource to them, and they lose nothing by burning your bridge.

[kpd905]

Have we concluded that this income does not qualify for the 20% pass-through deduction?

[CanuckExpat]

Have we concluded that this income does not qualify for the 20% pass-through deduction?

I don't think anyone knows the final rules yet, expect clarifications in the next month(s). From How To Hack the New Tax Plan:

Is there a concise example of who and what kind of businesses will be eligible for the new pass through tax deduction?

I'm betting thats going to require the IRS to fully write their guidelines and publish which probably won't be until end of January....   Does anybody know how long they took in the Bush tax cuts to redefine their rulebook?

Almost like passing a new tax plan in the week before it comes to effect is a little rushed :)

Short answer, maybe, if you file schedule C, probably not if you file as miscellaneous income? Who knows. And it will only be any sales you make (or get paid for) in 2018

[CanuckExpat]

Have we concluded that this income does not qualify for the 20% pass-through deduction?

Good information here: https://forum.mrmoneymustache.com/taxes/pass-through-business-deduction/

I'm thinking yes? Assuming your not just filing as miscellaneous income, and you aren't over $300k/$500k in total taxable income

[SomedayStache]

Three $75 sales in consecutive months at the start of the year. Nothing since.

Ditto - and I'm still with the 'old' company.

[hunt2eat]

Any updates on payments?  like others above I haven't been paid for my Oct or Nov adds.

[arebelspy]

Any updates on payments?  like others above I haven't been paid for my Oct or Nov adds.

Oct adds should have been paid weeks ago, I'd email them about that for sure.

Nov payments I'd expect any time now if you haven't received them.

I spoke with the owner again about this, he's working on being more timely. The good thing is that no one has ever not been paid for an AU, but yes, some have been delayed (past a reasonable amount even, in my opinion).

I confirmed with the owner that no one has had any cards being used any differently for asking for any customer support or questioning anything. Cards are listed and clients choose from them from a list.

[HikerT]

I have no idea if CreditPro is still one of the companies MMM deals with.  I was piggybacking with CreditPro long before it came in vogue at MMM - as such I am not a MMM referred client.  <specifics removed>  I am editing this comment by request and offering Cliff one more chance to pay in full.

[arebelspy]

MOD NOTE:

I have just removed a post.

A comment was made by a brand new member with this being their only post about not being paid a large amount ($6000) for many months (since February 2017) by the tradeline company, and adding some disparaging, potentially libelous, info.

I am reaching out to both the member who wrote it, and the owner of the company, to verify the claims.

If it is true (e.g. the person can provide copies of emails for proof), I will restore the post in full.

I am leaving this note for transparency in the meantime.

Cheers!


Claims verified (via forwarded emails from the poster). Comment restored (just above this post). Very troubling. Have reached out to the owner for comment.

[missundecided]

I reached out to the owner today because I haven't been paid yet for an Oct add. How good is he at responding? Although, based on the previous two comments, that may not be the right question.

[Joel]

Yikes. Glad I ceased selling (or at least attempting to sell) my tradelines with them.

[frozen]

I made over $2,500 with the originally recommended company last year. I have worked with them since before MMM recommended them and they have always paid me on time. I plan to stick with them throughout 2018.

[ditkanate]

I've never had an issue getting paid, but I did send an email yesterday to Cliff asking about my October payment.  No reply yet. 

[hgjjgkj]

I also sent an email (as stated in my earlier post) and have received no reply. Maybe we should revive talks of just doing this ourselves

[TomTX]

I also sent an email (as stated in my earlier post) and have received no reply. Maybe we should revive talks of just doing this ourselves

Need a ringmaster.

[beekayworld]

I've been reading the MMM blog for years and shared the information with my three adult children who have also read some of the posts, but this is the first time I've actually ever needed to PM another member.

So, here I am! A "new" member who has probably read every blog post MMM wrote and hundreds of hours worth of forum discussions.

I've been researching various tradelines and there are only three that seem legit. The others have horrible reviews (one has an "F" on the BBB site). Two seem to be the ones recommended in the old TL thread and this new one. I know we can't mention names.

[secondcor521]

I've been reading the MMM blog for years and shared the information with my three adult children who have also read some of the posts, but this is the first time I've actually ever needed to PM another member.

So, here I am! A "new" member who has probably read every blog post MMM wrote and hundreds of hours worth of forum discussions.

I've been researching various tradelines and there are only three that seem legit. The others have horrible reviews (one has an "F" on the BBB site). Two seem to be the ones recommended in the old TL thread and this new one. I know we can't mention names.

Feel free to PM me with the names and I can confirm / deny / give you the names of the old TL company and new TL company.

[dakota5176]

An update - I added an AU at the beginning and just received payment the beginning of January.  I'm happy to get payment but this seems like a very long time.

[DavidAnnArbor]

I don't understand the delays in payment, this guy has to be making money hand over fist.

[flashflooder]

I don't understand the delays in payment, this guy has to be making money hand over fist.

I think it's an administrative problem, rather than lacking the funding.

[DavidAnnArbor]

I don't understand the delays in payment, this guy has to be making money hand over fist.

I think it's an administrative problem, rather than lacking the funding.

But supposedly he was going to hire more staff for this very reason.