The Good and Bad of Credit Piggybacking

Why becoming an authorized user on a credit card could save you thousands

Whether starting out on your credit journey, or just starting on the road to rebuilding, the importance of having a good credit score cannot be stressed enough. I am not suggesting you should focus all of your efforts on achieving an 800 FICO score, however keep in mind a poor (or even mediocre) score can negatively impact the amount of money you spend on car insurance, deposits you place when renting vehicles, and in some cases whether or not you receive a job offer.

One hack many have used to improve their credit standing is “piggybacking”. For those who aren’t familiar, credit card piggybacking is when you become an authorized user on another person’s credit card for the sole purpose of building credit. Back in the day, the only way this could be achieved is if you had a parent, spouse, or relative with great credit who was willing to add you to a credit card they have had for years. Essentially, you were not interested in having an actual physical card, you wanted to gain the length of history the card had, and the card limit.

In 2019, there are dozens of for-profit companies that offer services that will help boost your score in no time. There are no guarantees provided, and if you do decide to try the credit piggybacking method, understand there are potential risks for the cardholder (see risks below). For you, there are cases when some card issuers will only report activity of the account on the primary cardholder’s report, thus defeating the point of piggybacking.

Let’s touch on the pros and cons of credit card piggybacking, along with our advice on whether it’s a good idea.

The Pros:

It could actually work. There are hundreds of cases documented online (via reddit, message boards, and social media) of people who have used paid services to rent a tradeline on their credit report, which in turn gave their FICO score an immediate boost. Often, the tradeline (credit card account) that you paid to report won’t stay on your file forever, so many people will time their piggybacking around a major purchase they plan to make (i.e Home Mortgage or Auto Loan). Others will leverage piggybacking when attempting to add new legitimate credit to their account.

Essentially the tradeline offers you a boost with their payment history, account age (which in turn boosts your average age of account up), and credit utilization (which ideally will help you get below 30 percent of total revolving credit reporting balances.

As a reminder, credit card piggybacking is not the same as credit repair. Whether you decide to do it yourself or hire a company to help in cleaning up your credit, repairing is the act of removing negative items (inquiries, collection accounts etc) from your report. Piggybacking credit is solely adding positive items on your report. If you have negative marks sitting on your file, you should understand that simply adding a tradeline or two may not be enough to negate those accounts dragging your score down.

The Cons:

There is always the chance that piggybacking could harm your credit report. In the event the primary cardholder defaults on the card, missing a payment, or even maxing out the credit limit, you will see a negative impact on your FICO score. If the cardholder is a close friend or family member, that could make for an uncomfortable conversation if their spending behavior changes, and you are now impacted.

You could always call the credit card company and asked to be removed from the account, however like everything in life, there is no guarantee if and when that will happen.

Then the bigger, long-term concern if you decide to do credit card piggybacking is how the company you use protects your personal information. You will have to provide them sensitive data to be added to someone’s account, which will likely include your full legal name, social security number, and date of birth. If you feel as if your personal information could be compromised, consider not working with for-profit companies.

If you decide to try to piggyback on someone’s tradeline to boost your score, make sure you conduct plenty of research ahead of time on the company providing the service. You should also reach out to the credit card company in question that would be added to your account, and find out their stance on reporting authorized users, as well as the steps you would need to take to be removed off of the account should you find the need to.

Watch YouTuber The Credit Card Maestro speak about becoming an authorized user

I would be remiss to not end off on a positive note. Credit Card piggybacking, if done safely and effectively, can allow you the ability to save thousands of dollars on a major purchase. In our example, we will assume Johnny Finance has used a piggybacking service to boost his credit score prior to applying for his first mortgage. He is about to put an offer in on a home that cost $360,000. His original FICO score was 660, which his lender advised would yield him an interest rate of 5.25% based on his minimal down payment of 3.5% of the purchase price. In that scenario, he would pay $355,656.00 over the life of a 30 year loan, on top of the original principal balance of $360,000.

Now if Johnny was able to apply with an improved score of 720 based off his piggybacking, his interest rate would drop to 4.50% with the same down payment, and the total interest paid on his home plummets down to $296,664.16 over the life of the loan.

Not only would Johnny see a decrease on his monthly payments, but over the life of the loan he would save himself nearly $59,000. Now that example doesn’t factor in a number of variables within Johnny’s control, and it also assumes he received a healthy lift in his score. At any rate, credit card piggybacking has been around nearly 40 years for a reason. Do your research, and see if it’s for you.


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