If you’ve got an excellent credit rating, you can boost a loved one’s credit score almost immediately through a practice known as piggybacking.
If you have great credit, you can improve a loved one’s poor credit score almost overnight by “piggybacking” them on your credit card.
A few years back, something called “credit piggybacking” was widely advertised as the savior for those with bad credit but plenty of money. According to the credit rebuilders, all you had to do was pay a stiff fee, and they’d make you an authorized user on the credit card of someone with spotless credit.
All it took was a few weeks and a thousand bucks, and voila! Your credit score was instantly boosted. It worked, too. All that the rating services saw was your association with that excellent font of credit, and just like the child’s game of piggyback, your score was lifted proportionately.
And Then It Changed
Of course, the credit repair companies abused the practice mercilessly, so FICO (the organization that develops the standard credit scoring models) rejiggered their formula… and suddenly, piggybacking no longer worked.
After facing public outrage (not to mention legal challenges) FICO was forced to put piggybacking back on the financial table–but only in a more clearly legal form. No more could you allow strangers to become authorized users on your credit cards. Very close relatives, however, were still fair game.
So if you’ve got a spouse or child who needs help with either establishing or rebuilding their credit score, piggybacking is a simple, effective way to accomplish that–while giving you a warm, fuzzy feeling inside.
People have been helping their college-age kids this way for decades, but you can do it for your spouse, too. The drawback, though, is that they really do have to be authorized full use of the card, which means they can spend all they want.
This is in contrast to the practice of credit builders, who used to pay people a few hundred bucks to let them add an “authorized user” who wasn’t really an authorized user at all. This loophole has been closed since 2007; don’t let the credit repair companies tell you otherwise.
But as far as your kid or spouse goes, legal is legal. If you trust the person you’re trying to help, then go for it. If not, proceed with caution. As with the kiddie version, you practice credit piggybacking at your own risk.