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'Piggybacking' Lives On
Piggybacking, a technique that allows consumers with good credit to boost other's credit scores by adding them as an authorized user, will live on. If you haven't heard the term before, it's not a new thing. Parents have used the technique for many years to help their children build solid credit at a young age, but in recent years private companies have begun to take advantage of the practice by connecting bad-credit consumers with good-credit consumers for a fee.
The Fair Isaac Corporation, creator of the FICO score, had announced in 2007 that its new credit scoring formula would exclude all benefits of piggybacking due to increasing abuse. However, amidst a great deal of controversy in the industry, Fair Isaac announced last week that they changed their minds. Mike Campbell, Fair Isaac's COO, said "Fortunately, we were able to come up with technology that makes it much harder to game the system." Let's hope he's right.
To read more about past events relating to the new FICO Credit Scoring Model, visit our Featured Article, "Experian Implements New Credit Scoring Model: Authorized User Accounts Dropped"
