Is credit card piggybacking a good way to build credit?

Woman lying on couch with credit card and tabletImage: Woman lying on couch with credit card and tablet

In a Nutshell

Piggybacking credit means becoming an authorized user on another person’s credit card as a means of building credit. But credit card piggybacking has its risks, whether you do it via a close relative or a for-profit company.
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Building credit isn’t easy. As we mention in our guide on the topic, many lenders simply don’t want to risk extending credit to someone with no history of repaying credit.

Applying for a secured credit card or credit builder loan are two potential options for establishing credit, but you may also be interested in the concept of “piggybacking” credit. Piggybacking credit is when someone adds you as an authorized user on their credit card to help boost your credit.

This method isn’t guaranteed to work, one reason being that not all credit card companies report authorized users’ activity to the major consumer credit bureaus in a way that helps them build credit. In some cases, an authorized user’s activity is only reported on the main cardholder’s credit reports, which defeats the point of piggybacking credit.

For many people new to credit, the first option for piggybacking is likely their parents, a significant other, or a close friend with good credit and responsible spending habits. But what if you don’t have those options?

In recent years, a number of for-profit credit piggybacking services have popped up. These services add consumers as authorized users to strangers’ credit cards for a price. But these services exist in an ethical and legal gray area, and some credit-scoring models, such as FICO® Score 8, have attempted to curb the benefit of what’s sometimes referred to as “tradeline renting.”

In this article, we’ll go over both kinds of credit piggybacking — the traditional kind and the for-profit kind. We’ll also run through the basics of credit card piggybacking, from who can help you do it to whether it’s a good idea in the first place.

Does piggybacking credit actually work?

Piggybacking credit could result in a small credit boost, but it doesn’t always work as planned.

There are two main issues with credit card piggybacking, one of which involves the credit card companies and one of which involves the person adding you as an authorized user.

Your credit card activity may not end up on your credit reports

It’s frustrating, but not all credit card companies report authorized users’ activity and those that do may not report it in a predictable way.

In some cases, your responsible spending as an authorized user will end up on the main cardholder’s credit reports but not on your own. To avoid this, consider calling the credit card company ahead of time to ask how they will report your credit activity as an authorized user. They might not disclose this information, but it’s worth asking.

Piggybacking with an irresponsible cardholder could do more harm than good

It can be difficult to convince someone to add you as an authorized user. What if you spend irresponsibly and sink their credit? That’s a situation nobody — not a close friend, not even a parent — wants to take on.

But it also makes sense for you to be cautious. After all, if your credit “host” always pays their credit card bill on time, keeps their credit card utilization low and follows other good credit practices, it can reflect positively on your credit, too.

However, you’ll only want to be added to a card as an authorized user if the account is in good standing. If your scores end up negatively impacted due to being an authorized user on someone else’s credit card account, don’t hesitate to take action. Consider calling the credit card company and asking to have your name taken off the account. And then you may want to contact the credit bureaus to request the account be removed from your credit reports.


How to get added as an authorized user

Getting added as an authorized user on a credit card account is usually pretty easy. The primary cardholder will typically have to log into their account and find the page to add an authorized user. If the cardholder would prefer not to add an authorized user online, the cardholder can call the phone number on the back of the credit card to add an authorized user over the phone.

Credit card companies normally request the name and birthdate of the authorized user, at minimum. Sometimes they’ll request the authorized user’s Social Security number as well. Some banks allow the cardholder to customize access for authorized users, while others do not.

The hardest part of getting added as an authorized user may be convincing the primary cardholder that it’s a good idea.

Two types of credit card piggybacking

Credit card piggybacking typically involves reaching out to a parent, relative or close friend, but this isn’t always the case. Let’s go over the most common types of credit card piggybacking today.

Traditional piggybacking

Traditional piggybacking works essentially in the way we’ve outlined above. You find a trusted friend or relative to add you as an authorized user, and their card’s payment history begins to show up on your own reports (assuming the credit card company reports authorized users’ credit activity to the credit bureaus).

Technically, you don’t even need to use the credit card yourself for piggybacking to work. It can be helpful to learn the basics of responsible credit by charging and paying off small purchases each month, but merely being listed as an authorized user on the primary user’s account means their payment history may begin to show up on your own credit reports. Again, this is only the case if the credit card company reports it as such.

For-profit piggybacking

And then there’s for-profit piggybacking. This is when a company can help someone piggyback as an authorized user on other someone else’s credit card. In many cases, these people are strangers to one another and are paired up. The company typically charges a fee for facilitating this connection.

For-profit piggybacking can be a risky endeavor. We generally don’t advise being added as an authorized user unless you can trust the primary account holder; if you’re dealing with a stranger and a for-profit company, that trust might be harder to come by.

Is for-profit credit piggybacking legal?

The companies that offer it would argue yes, but for-profit piggybacking exists in somewhat of a legal and ethical gray area.

Some companies have come under legal scrutiny over whether they’ve violated state laws with their piggybacking services.

In a word, beware.

Potential risks of for-profit credit piggybacking

There’s also the question of whether it’s worth it in the first place. Starting with its FICO® Score 8, FICO has attempted to discourage for-profit credit piggybacking with a scoring model that “substantially reduces any benefit of so-called tradeline renting.” It’s possible that newer and yet-to-be-released credit-scoring models may incorporate ways to further disincentivize this practice.

For-profit piggybacking could also leave you more vulnerable to ID theft, depending on how the company uses and protects your data. You may need to provide your date of birth, legal name, and Social Security number when applying for a piggybacking service. If you’re unfamiliar with the company or unsure of how they secure their data, it’s a risk you shouldn’t take lightly.

Bottom line

Credit card piggybacking could be a way to help build credit, but it may come with some serious downsides and caveats to consider.

It’s also not a panacea. Building credit is a journey that typically involves a number of steps, and no single action is guaranteed to launch your credit scores into the stratosphere.

If you’re building credit from scratch, consider taking some of those other steps before committing to piggybacking as part of your strategy. You could have a parent or close friend co-sign a loan, apply for a secured credit card, apply for a credit builder loan or even try to get your rent payments reported to the credit bureaus. And maybe most importantly, be sure to treat any new credit accounts you open responsibly.

For more tips on how to get started, check out the Credit Karma Guide to Building Credit.

About the author: Andrew Kunesh is a finance and technology writer from Chicago. He’s passionate about helping others maximize their money and purchases. When he’s not writing, you’ll find Andrew traveling the world in search of the pe… Read more.