How Does Piggybacking Credit Work?

Piggybacking on someone’s credit card can be an excellent way for the person piggybacking to improve their credit. It’s more valuable in some situations than in others. But how does it work? Is it legal? Are there risks?

Piggybacking credit is the practice of letting someone with a thin credit file get added as an authorized user of someone with excellent credit. This is not the same arrangement as being a co-signer or a joint account holder—these allow for legal liability over the account.

What is Piggybacking Credit?

When a person becomes an authorized user on someone else’s account, they receive the entire history reflected on their own credit report. This means that adding an account with characteristics such as a long credit history and low utilization rate can help raise the authorized user’s credit score and give them more credit history.

How Does Piggybacking Credit Work?

An authorized user is a person who is permitted to use a credit card account but isn’t the primary account holder. This means that authorized users are not responsible for making monthly payments on their credit cards, nor do they have access to view billing statements or transaction history online.

What is an Authorized User?

If you allow a child to use the card, it can also teach financial responsibility and give them access to money in an emergency. There can be perks for the adults as well. The primary cardholders can earn rewards for their kids’ spending. 

Piggybacking Credit Between Parents and Kids

For-profit piggybacking is the process of renting your excellent credit to a stranger in exchange for payment. You can use a profit-seeking company as an intermediary, called a tradeline company.

Hiring a For-Profit Piggybacking Service

A tradeline is an account that appears on your credit report. An authorized user tradeline appears when you add a person to your credit card account as an authorized user. The person added doesn’t automatically receive a credit card or have access to the credit line.

What are Authorized User Tradelines?

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