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Credit Card Piggybacking Score Boosting Still Effective

Credit 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 [3] 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 [4],” 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 [5] 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 [6])