A credit transfer is also known as an automatic credit sweep. This term refers to an agreement between a bank and a customer (usually a corporation) whereby all inactive or excess funds in a deposit account are used to pay short-term debt to a line of credit. The term “credit transfer” is used to describe a process that is commonly referred to as credit repair. A credit transfer involves disputing all the elements of a credit report at once.
It is often presented as an option for victims of identity fraud. The party offering it may appear as a legitimate credit repair company. The process itself is fraudulent, as the entity would have to gain access to your credit report and delete items illegally. But a negative element, such as a collection account, is likely to reappear the following month, so that route is useless in the first place.
Credit sweep providers use a variety of different tactics, but there are some common trends. Typically, credit sweeps refer to the practice of disputing all of the elements (or perhaps all of the negative elements) in one's credit reports, usually claiming that the accounts were the result of identity theft. That's why it's called a credit sweep: Credit sweeps are an effort to sweep credit reports of all negative information. If you conduct a credit sweep that questions everything in your customer's credit history, but even if only one of the accounts has been opened by your customer, you are committing fraud.
If the credit transfer is successful, CRAs must remove all negative information involved within four business days and prevent it from reappearing on your report, which will “eliminate all negative elements from your credit report.” But, even if credit sweeps were completely legal, it's worth noting that factual disputes don't take longer than a bad credit transfer (if the right tools are used). If you've been in the lending industry for a while, it's likely that a customer approached you to make a credit transfer.