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Credit Card Piggybacking Score Boosting Still Effective

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Credit Boosting PiggybackingCredit score piggybacking is when someone with a worse credit score “piggybacks” as an authorized user on a credit card issued to someone with a better credit score. Parents would add their children as authorized users, couples would add each other, and people with good credit scores even “rented” out authorized user slots to people with poorer credit scores. The person with worse credit would piggyback on someone with better credit and the entire credit history of the card would appear on the new authorized user’s credit history, presumably boosting their score.

Once people figured out this clever credit card piggybacking trick, it was abused. No one objects to a parent adding their children as authorized users, but I’m sure we all feel that strangers adding each other for pay is an abuse of the system. That said, if the people with good credit don’t mind the risk and if the people with poor credit don’t mind paying, who are we to get in the way of capitalism?

The credit bureaus refer to this as “authorized user abuse,” whereas consumers and credit score hackers call it “credit card piggybacking.” It reminds of politicians and their naming games… estate tax vs. death tax, etc. 🙂

The credit bureaus hate it because it’s a hack that breaks their delicate system. A few years ago, they even talked about adjusting their algorithm to account for this. Apparently they never did because I read on Reddit this morning that someone used this strategy to boost their score significantly in a short period of time (550 to near 700 in two weeks). While one data point doesn’t make a trend, this does give some proof that credit card piggybacking still works and that the bureaus never did change that algorithm.

The only question left is whether this is fraud. I believe paying someone to add you as an authorized user is fraud, as much as lying on your mortgage application is fraud. I also suspect it’s extremely difficult to detect, which is why people do it. For parents adding children, it’s not much different than strangers but much harder to prove fraud (since there’s the familial relationship, other plausible reasons why the children is being added, etc.) but if the goal is to boost the credit score, it’s still fraud. I have yet to hear of any court cases ruling on this issue.

Wherever you stand on the legal issue, it appears that credit card piggybacking still works.

(Photo: fosforix)

{ 8 comments, please add your thoughts now! }

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8 Responses to “Credit Card Piggybacking Score Boosting Still Effective”

  1. Hannah says:

    How do you find out which credit cards will actually affect the authorized user’s credit?

    When I have added authorized users on two of my cards (a discover and a store card) it only required their name, and there was no verification of their identity. Obviously these cards would not impact the authorized user’s score.

    Also, in return for bringing up the authorized user’s score, is the card owner’s score lowered — like they are guilty by association? If not, I don’t see any down side to adding authorized users (who I actually know, not strangers) to my accounts just to help them out, as long as I don’t actually give them the cards to let them spend my money.

    • Jim says:

      I don’t know how you know which cards will affect the authorized user’s credit but I do know that the card owner’s score isn’t lowered by virtue of the added user. The authorized user gets the owner’s credit card history but there’s nothing for the owner to get, other than the risk that the authorized user spends a lot of money. In the situations where people rent their authorized user spot, the renters doesn’t get the card.

    • Nay says:

      I just piggy backed off of my mother. She added me to her Capital One Visa Card, she got the Venture Card for travel perks. She added me on June 2012 and it’s now an account that’s on my credit report September 2012. Capital One didn’t ask for my social when she added me, but they somehow found me. I know for sure this credit card will work. Hope this helps.

  2. David M says:

    Do I think it’s Fraud – NO.

    If credit card companies REALLY WANTED to stop this it would be very easy – I do not think they WANT to stop this. All they do is when you try to add an authorized user – that is not in their database – they require you to call and speak to a real person before they add/reject the authorized user – simple!

    Do I HOPE that every person who does this and it does not work out well for them pays EVERY DOLLAR the other person incurred – ABSOLUTELY!

    Don’t do the crime if you can’t pay the dime!!!! This seems like a case of “EASY MONEY” that could go REAL BAD, REAL QUICK!!!!!

  3. Arvin says:

    My parents added me when I was 9 years old and I never knew about it until I got my first credit report as an adult and saw that my average age of account was over a decade. They never gave me the card or told me about it, and I never (well, not never) abused the privilege when I was an adult. Definitely enjoy the nice credit score now.

  4. Martha says:

    My parents gave me a store credit card when I was young because they hated to shop (still do). I was allowed to purchase my new school year clothes with a certain budget, it was up to me to determine what I got with that budget as long as I got the essentials (1 pair of pants, etc). That really helped me learn to shop for the best prices and be more resourceful with “my” money! Plus when I got older I had a longer credit history.

  5. Daniel says:

    I added my 2 year old daughter to our credit card as an experiment in this. She’ll have the highest credit score an 18 year old can have I’m guessing…

  6. Aiden Van Wright says:

    this worked for me my sister added me to her credit card not as an authorized user but rather as joint account holder.

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