Quizzle Weekly Money Tips: ‘Authorized User’ Status

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This week, Quizzologists took a look at an old stand-by in the consumer’s credit-building arsenal: the piggyback. For those unaware of the phrase, ‘piggybacking’ is a method of boosting the credit score of one person by adding them as an authorized user to the credit accounts of those with a better payment history. It’s something like a personal finance steroid.

Once upon a time, the practice elicited little to no controversy, as it was typically kept within families—and within reason. But with the start of the 2008 recession, lenders began complaining that nefarious credit repair services had hijacked the practice. For a fee, the services would connect people with low scores to the accounts of complete strangers with better scores.

This new, faceless form of piggybacking created a big problem for lenders. In their minds, this was tantamount to fraud; an outright falsification of a person’s creditworthiness rather than the more benign—and less risky—helping hand of a parent. As a result, some folks are now getting favorable loan terms on false pretenses.

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Yet, despite serious efforts to curtail the sneaky effectiveness of this phenomenon, the piggybacking practice continues to this day. So, is it a useful trick or a shameless scam? We’ll let you decide on the merits.

Here are some pertinent articles from the Quizzle blog to help you make up your mind:

Building Credit through ‘Authorized User’ Status
How to Help a Friend with Financial Problems
Five Tips to Help Your Children Build Credit
How to Build Credit from No Credit in 6 Easy Steps
Can I Use My Spouse’s Good Credit?
3 Ways to Rebuild Your Credit after Chapter 7 Bankruptcy