Reader Question: Is Piggybacking Gone?

Dear Gerri:

I read that you said that piggyback someone else's credit card could help boost your credit score.  My brother called his credit card company to add me as an authorized user and they said it would not help me. I would be a secondary on the card, not a primary.  If I was added as an actual person on the account they have to run my credit score and that would actually hurt me.

Please clarify this for me.  I am very confused.  I am working on increasing my credit so that I can by a house and get a better deal.

Thank you so much for your assistance with this matter.

- Confused

Dear Confused Homebuyer:

Piggybacking used to be a great way to boost your credit quickly. It sounds like you understand the concept, but let me repeat it. You would ask a friend or relative with a major credit card to add you on to their credit card as an authorized user provided they had

a. paid it on time for years and

b. didn't have a high balance relative to the credit limit.

You never even had to use the card for it to appear on your credit reports. Most card issuers reported authorized users to the credit reporting agencies and reported the entire account history when they did. That would result in a positive account with a longstanding credit history on your credit report – and that usually meant a boost to your credit score.

However, due to abuses by credit repair companies that were brokering the rental of authorized user slots on credit cards, this tactic is in the process of being blocked by the credit agencies. We have reported on that change previously on this blog several times. The card issuer could be warning you of this change. It's also possible your brother's card issuer does not report authorized users to the credit bureaus, a policy that may even have been in place before the brouhaha over rented tradelines.

I don't know the extent of your credit issues, or what kinds of problems they are causing you in getting a lower home loan rate, but I would suggest you be cautious about quick fixes. As we've seen with the mortgage meltdown, stretching things to squeak into a loan isn't a great long-term strategy.

If you do want to fully understand your credit report and scores, I would highly recommend my colleague John Ulzheimer's book, You're Nothing But a Number. Read John's straightforward advice and by the time you get done you'll probably know more about credit reports than your loan officer!

Best of luck with your home loan shopping.

Gerri Detweiler – Personal finance author, radio host and credit expert. Gerri contributes budgeting, debt recovery and savings information online.

Comments

[Seth]

What if all you want to do is lengthen your credit history? I was going to use this method, is there nothing I can do to counter my short (5+) years of credit history?