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. 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.

In this article, we’ll 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.

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

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.

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.

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).

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.

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.

Bottom line

If you’re building credit from scratch, consider taking 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.

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.