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Definition: Piggybacking

Piggybacking is the practice of adding someone with poor or no credit as an authorized user on a credit card belonging to a person with excellent credit. There are two types of piggybacking, one involves strangers and the other involves family members.

The practice of one stranger piggybacking on another stranger's credit has FICO in a rage. Certain online businesses are profitable by playing the system: They earn their fees by finding consumers with good credit to take on those with bad credit. The bad-credit consumers pay the company a hefty fee, and the company pays the good credit consumers a much smaller fee.

Many parents use piggybacking as a way to build credit for their children. By adding them as authorized users to one or more cards, the parents' credit history for the particular card appears on the child's credit report. The child is able to build a healthy credit history without even having her own credit card. When it comes time for her to apply for her own card or rent an apartment, chances are she won't need a cosigner because of her established credit history.


Join The Conversation
aimeeb aimeeb 8 years
Hmmmm I used to have kind of crappy credit from back when I was 19. I got a card a few yrs back by paying a small fee to get establish with them to take me on, is that what this is?! I'm confused. I did it in hopes of rebuilding my credit score.
sorrowja sorrowja 8 years
I thought about doing this when my husband and I were planning to buy our home. However the company wanted way tooo much $$$. So instead I just paid off all my negative accounts in about 8 months (I worked a lot of OT). After which I wrote to the 3 credit agencies every other week and little by little all the negative accounts about 13 of them came off. And we were able to get an interest rate of 6.25%
CoralAmber CoralAmber 8 years
My mom did this too. I never thought about it as having an impact on my credit score, but it was really easy for me to get a credit card later.
lawchick lawchick 8 years
My mom got an extra of her credit card with my name on it when I was about 18. We weren't thinking about the credit issue, it was just more convenient when I was running errands for her! It wasn't until 10 years later that either of us realized the effect it would have on my credit. My credit wouldn't have been bad at that point anyway, just not as extensive. But it ended up helping me get a great interest rate on my house :)
hmcmcd hmcmcd 8 years
I thought this was illegal now?
insanitypepper insanitypepper 8 years
I did this for my husband.
verily verily 8 years
I was not piggybacked, but I was placed as a co-signer for the car my parents bought me. I believe that helped me quite a bit, and with an old credit card account and timely bill paying, my credit score is excellent.
ilanac13 ilanac13 8 years
i guess i never thought about it like that. when i was younger, my mom added me as an authorized user on a few of her cards - and by the time i got to college, i was able to get whatever i needed on my own cause i had my own credit somewhat established. i never considered it to be 'piggy backing' or anything like that. in today's day of bad credit and lousy financial responsibility - i'm not surprised the there are people that are doing this in a sinister way. my fiance doesn't have the best credit and now he's an authorized user on one of my accounts that we are great with maintaining, and i do kind of hope that it helps him out a bit since we'll be interested in getting a house soon.
ehadams ehadams 8 years
My parents did this with me. On my credit report my "oldest account" is from 3 years before I was born! I just now added my boyfriend to my credit card- he is from England and has little credit here, so we are trying to build it up before we get married and buy a house.
poizenisxkandee poizenisxkandee 8 years
yup parents definitely did this and explained it to me. my dad was into finance and stock stuff for a while, but otherwise hes a doctor, as is my mom, and they make a comfortable living. so he told me what my fico score was and how putting me on their card would help it so itd be easier for me when im on my own to get my own house or car or whatever it is i want. but im off to college in two days and theyre cutting me off that card and helping me pick one on my own.
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