Bank Account

Last month it was revealed that the well-known bank, Wells Fargo, engaged in some less-than-ethical practices. Every time a new customer opened up a bank account with Wells Fargo, the customer representative would open up a second ‘fake’ credit card account without the customer ever knowing.

These fake accounts went undetected for a number of years until the scandal was made public. Now, millions of people are discovering that they have a fake account opened up in their name.

If you discovered you are one of the millions of people with a fake Wells Fargo account opened in your name, you may be wondering what to do about it. Do you close the account or leave it open? The answer to that question may surprise you.

Closing a Fake Wells Fargo Account May Be a Bad Decision

Your first instinct upon learning that a fake credit account was opened in your name and without permission might be to close it down. Unfortunately, that may be a bad decision.

Many banks and financial institutes will look at your credit score to determine what type of loan to offer you. It might be surprising, but that fake Wells Fargo credit card account may actually be helping your credit score instead of hurting it.

How the Fake Wells Fargo Account is Helping Some People’s Credit Scores

There are all types of factors that influence your credit score. Factors such as how long you have had a line of credit, whether you make payments on time, and your credit history determine your credit score.

People who had a fake account open up in their name are having that account factored into their credit score. This could unknowingly be helping people. Or you can contact Wells Fargo and request a new card from the fake account to be sent to you. You could then start using the card. However you would only want to use it on something small, like a tank of gas each month, because you would need to pay the card of each month. Paying the card off each month is a vital way to increase your credit score.

One of the biggest factors that determine your credit score is your debt to available credit ratio. This is how much debt you have – or how much you owe in credit card bills and mortgage – vs. how much credit is available to you. The Wells Fargo account could be increasing your available credit, which means your score could be going up.

Understanding Your Debt to Credit Ratio

For example, if you had approximately $1,000 debt on an available credit line of $2,000, your debt to credit ratio was 50%. However, if Wells Fargo opened up a fake account and gave you a $2,000 credit limit, your credit line is now $4,000, but the debt you owed is still only $1,000. Instantly your debt to credit ratio decreased to 25%.

The better your debt to credit ratio is, the more attractive you are to banks and financial institutes. This means they are more likely to approve you for loans that can be used to get everything from cars to homes and jewelry.

Understanding credit scores and how they work can be a tricky thing, even without factoring in fake Wells Fargo accounts. If you have any questions regarding how a fake Wells Fargo account may be impacting your credit score, it is best to talk to credit consulting service like Build My Scores.

Contact Build My Scores to schedule an appointment to receive a free consultation where you can discuss how this issue is impacting your life and your credit score.