I field a lot of phone calls from newspaper reporters trying to understand the 3 S's of real estate and mortgage fraud: Size, Scope, and Specifics. Any mention on my part that "credit enhancement' is one specific we should all be concerned about, and I am usually greeted with uncomfortable silence followed by something along the lines of, "What's credit enhancement'

The last time I wrote about this topic was March 6 of last year, so for those of you who aren't familiar with the term, )from a real estate and mortgage fraud perspective) credit enhancement is any action taken by an individual that intentionally results in falsely boosting one's credit score for the sole purpose of obtaining a real estate-related loan. Practically speaking, the most popular way of enhancing one's credit is to have their name and Social Security number added as an authorized user to a credit card account connected to an individual with stellar credit.

Unfortunately, this practice is not illegal, but it should be. The idea behind this is that by listing a family member or trusted friend as an "authorized user' on your credit card account, you are establishing some sort of "collective" credit history. That practice certainly makes sense in families in which members trust one another and actually operate as a team to ensure financial stability and build wealth as a unit. Unfortunately, though, and more often than not, credit enhancement is a service people buy, and in the end, no one but the fly-by-night credit enhancement companies actually benefit from the practice.

These credit enhancement companies that seem to be popping up all over the place apparently want to create an "extended family" that consists not only of family members but also includes complete strangers. Many credit card companies enable you to legally add anyone to your account, so someone with poor credit can ride the coattails of a more responsible borrower. I would strongly caution account holders from adding the name of anyone they do not know and trust implicitly to their account. After all, if they default on a loan, your credit suffers. Moreover, the practice is unethical. It dupes lenders into approving loans for those who have less stellar credit ratings, and provides those people with lower-interest loans that they would otherwise be unable to qualify for.

To fix the problem, credit reporting agencies need to change the formulas they use to calculate credit scores so that the credit scores of additional cardholders do not benefit from the primary cardholder's credit history. For many homeowners who participate in credit enhancement schemes, the benefits are temporary at best. All of us should be after the three main credit-reporting agencies'Equifax, Experian, and Trans Union'to see what, if anything, they are doing to remedy this problem.