Piggybacking is a credit-boosting strategy that involves becoming an authorized user on another person’s credit card account in order to benefit from their positive credit history. By being added to a responsible individual’s account, someone with poor or limited credit can leverage the credit history of the account holder to improve their own credit score. Piggybacking can be done with both personal and business credit cards.
Recently, customer piggybacking has gained popularity among those who have had difficulty obtaining credit due to low credit scores, bankruptcy, or a lack of credit history. Though customer piggybacking has its own benefits, it’s important to be aware of its risks and to approach it cautiously.
Benefits of customer piggybacking
By understanding the advantages of customer piggybacking, you can determine whether it’s a viable option for you to improve your credit score. So, let’s explore some of the most significant benefits of this technique:
Improved credit score
One of the major benefits of customer piggybacking is that it can improve your credit score. When you are added as an authorized person to someone else’s credit card account, the account’s positive payment history will be reported to the credit bureaus. This will improve your credit score, as long as the account is in good standing and has a low balance.
Faster credit score improvement
It helps to improve your credit score faster than other techniques. This is because the account’s payment history will be added to your credit report as soon as you are added as an authorized user. This means your credit score will improve within a few months of being added as an authorized user.
No responsibility for repayment
As an authorized user, you are not responsible for making payments on the credit card account. This means that you will not be held liable for any debts incurred on the account. This makes customer piggybacking a low-risk method of improving a credit score.
Risks of customer piggybacking
It’s essential to be aware of the potential risks associated with customer piggybacking before considering it as your next credit-building strategy. In the following section, let’s explore some of the most significant risks associated with customer piggybacking:
Damage to credit score
If the account to which you are added as an authorized user has a negative payment history or a high balance, it can damage your credit score, too. This is because the account’s negative payment history will be added to your credit report as well, and a high balance can negatively affect your credit utilization ratio.
Unwillingness of the account owner
Some credit card issuers do not allow customer piggybacking, and some account owners may also be unwilling to add you as an authorized user to their credit card.
Dependence on the account owner
When you are added as an authorized user, you are dependent on the account owner to make timely payments and maintain a low balance. If the account owner fails to do so, it can negatively affect your credit score.
How does piggybacking work?
Piggybacking involves the primary account holder adding an authorized user to their credit card account. The authorized user is then able to use the credit card and have their credit activity reported to the credit bureaus. This activity is factored into the authorized user's credit score as if it were their own.
How can credit card issuers prevent piggybacking?
To prevent unauthorized piggybacking, credit card issuers typically provide options for primary account holders to control who can be added as an authorized user. Some card issuers may also set spending limits or require the authorized user to provide personal information such as a Social Security number (SSN) or date of birth.
What type of attack is piggybacking?
Piggybacking is a type of social engineering attack that involves exploiting trust to gain access to a system or resource. In the case of credit piggybacking, the attacker gains access to a positive credit history through the trust of the account holder.
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