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Piggybacking: What's the Deal?

Piggybacking, a technique often used to build credit by paying to become an authorized user of a stranger's credit card account, has been under fire since it first gained widespread popularity in 2007. In practice, the loophole in the credit scoring system works great, which is perhaps why it's ruffled the feathers of so many people that find it unfair and sleazy.

Should it really be so easy to dupe the system? Instead of slowly building my credit history one on-time payment after the next, I can simply pay someone to add a credit card with a high credit limit, low balance, and a clean payment history directly to my credit report. And voila - I instantly have stellar credit and thus a higher credit score.

Millions of people have benefited from artificially boosting their credit scores this way, and there's no doubt in my mind that many credit repair agencies have made a nice profit from connecting buyers and sellers of trade lines as well.

The controversy around piggybacking continues today. In fact, each time the topic is brought up in our Credit Talk Forum, it's cause for a lengthy and controversial thread about whether or not the new FICO 08 model can really do what it claims. That is, weed out those individuals paying to add seasoned trade lines to their credit reports from legitimate authorized users.

Of course, adding a spouse or a family member as an authorized user to help boost their credit score is nothing new. People have been doing it for ages, and it's perfectly legal. According to the FTC, there's nothing illegal about paying to have it done as well (although there may be some ethical questions to consider). I'm not saying I think piggybacking is completely fair or our credit-scoring model is perfect, but once and for all I really would like to know - what's the deal? Has piggybacking finally seen it's day?

In a press release issued earlier this year, Fair Isaac claimed that "FICO 08 helps lenders protect against authorized-user account ‘piggybacking’ by incorporating new patent-pending technology that materially reduces the potential score impact associated with the abuse of authorized user accounts. By considering authorized user accounts in score calculations, FICO 08 continues to support lenders’ abilities to comply with federal regulations." Well, that makes it all so clear now. There's a new "patent-pending" technology that separates the good from the bad. I wonder what that might be? Matching addresses somehow or weeding out unused authorized user accounts?

All the possible methods have been discussed before, and none of them will work. While I have no doubt there are some really smart mathematicians working hard over at FICO day and night, I'm not quite sold on the whole secretive "patent-pending" approach that FICO has taken. It sounds more like a scare tactic to me. There will always be a lot of speculation over this issue, so I prefer to just look at the facts. It's a fact that authorized user accounts are still included in the FICO credit-scoring model today. We know that based upon FICO's own words in the statement above. And we also know that the ECOA (Equal Credit Opportunity Act) precludes the removal of authorized users, and it always will until the law itself is changed.

So, until the mathematicians are willing to explain in more detail how they can magically tell whether an authorized user is a spouse or not, or Congress changes the law, I'm inclined to believe nothing much has really changed. What do you believe?

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Joshua Heckathorn's picture

Joshua Heckathorn is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past twenty years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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Jeffery Dennis's picture

Apex Credit Services just buffaloed me out of $2400.00 for AU's on four ten year old credit accounts. I'm spending all my time fighting to try to recover some of my cash. Not one of the four purchased AU's posted at either of the three bureaus and now I can't even get anyone from Apex on the phone to talk to me. They basically just took my money! Who can legitimately provide this service within a reasonable time?? Who do you recommend and why?? Looks like Im still in the market and down $2400.00

Joshua Heckathorn's picture

I'm frankly surprised to learn of your experience with Apex. From what I've seen, they're one of the best in the business, and I've heard very few other complaints regarding their services. I hope you're able to get the situation worked out quickly.

Plastic Cards's picture

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Scott Beck's picture

I understand the scams I lucked out with this company called improvecredit.biz. They were the real deal and they offered me a discount too! My friend Brian O'conner told me about them and I decided use them. I saw an increase on my score and they helped me settle on my accounts. They didn't promise me unreasonable things either they just worked for me that's all. Hope this helps someone out there who needs a house like my family and I needed one.

Bill Airy at BoostMyScore.NET's picture

I run a highly reputable "piggybacking" brokerage called www.BoostMyScore.NET. I have been adding people as AU's to my cards for over 5 years now, and I am very good at it. My company has a perfect record with the BBB and has never once, not ever, received a complaint. It is for these reasons that I truly despise my competitors who have recently sprung up out of the gutters and have given my industry a bad reputation. Operating a credit piggybacking firm is far too easy to do honestly, correctly, and fairly; there is no good reason for it to be done otherwise. Leave those thieving and corrupt tactics up to the banks.

I too was duped out of money by Jason and the Apex team when they failed to provide services as promised to my brother-in-law. Our two companies had a good working relationship, but their greed got the better of them, so we cut them off. That was about a year ago. I am sad to hear they are still around causing the same problems with others that they inflicted upon me.

To "Jeffery Dennis": Call me and I will make up for their wrongdoings. I hate nothing more than one of my competitors furthering the aforementioned "sleazy" reputation sometimes associated with our industry. I will do whatever I can to change your mind about piggybacking. Call me: 1-800-531-1472 ext. 737.

As far as Josh's question about whether or not FICO 08 has changed anything, the answer is no, not really. All they did was make a strong attempt to scare legitimate business owners, such as myself, and hard working Americans, like you, into believing that they had closed the "loophole" that they themselves created.

We have tested piggybacking on the FICO 08 system and there was absolutely no difference to the score calculated by a machine running the older FICO Classic model.

The fact of the matter is simply that Fair Isaac is desperately trying to manage their clients' (the banks) expectations. If their scoring product can be manipulated, then there really isn't any value to it. FICO doesn't want to lose those billions of dollars in royalties simply because some little guy in Denver, CO found a loose thread in the sweater and decided to pull on it. It's that simple.

Marc Augustine's picture

Good one, Tradelines are typically seen as the key to fast credit to the majority of people

San Armanier's picture

I was taken by 3 different sources, and each time I was so sure they would post. I made it my mission to find real sources, after dealing with others who would not reveal there sources without having to pay huge upfront fees. I then posted an ad to actually sell tradelines, and a very nice woman called up and said she had purchased 3 AU's from tradeliner.org, and was curious to what lines I had. She was very happy with the service, and even got here first $10,000 Visa from Regions, She apparently got the contact through a friend. She was lucky, most start out getting ripped. She was calling around trying to get the best pricing, and acting like there is no risk at all. I told here to be careful out there in this industry, 80% are scammers. I had her send me here file, so I could verify trade lines were posted.
Anyone else used this service? I cant afford to take another hit, and need credit asap. If anyone uses them, please post your result, Only good for all. Thanks.

Quora's picture

How does becoming an 'authorized user' on someone else's credit line effect your own credit score?...

This method of piggybacking still works. Assuming the account actually shows up on your credit reports after you've been added as an authorized user, you should then see a boost in your FICO scores. In addition, there would be no effect on the other p...

Quora's picture

What are the ways to find credit cards that can be issued to someone with great credit but few revolving credit accounts?...

If your current secured card has a low limit, make sure you're using a very small amount of your available credit in order to keep your credit utilization [1] around 10% or less. That will make sure your FICO credit scores stay happy. You may also wan...

Quora's picture

How do I build my credit score with little credit history?...

A FICO score under 650 puts you in the poor credit range. At this point, I wouldn't count on getting approved for a travel rewards or 0% interest credit card. You need to focus on building positive payment history first and improving your FICO scores ...