Credit Repair Services and Information
Credit Repair by Piggy Backing
What can be done with your credit rating?
Imagine if you will a seemingly simply way to
improve your credit report, increase your credit score all just by “borrowing
someone elses credit card”. Sound too good to be true or too difficult? Let me
explain. There is a term called Credit Piggybacking and it has actually been happening
for years but for the most part, to a smaller extent than more recently.
It all kind of started when parents could help their children out by allowing
their children to be on their credit card accounts to help them build their own
credit.
Basically here is how the practice works:
If you are suffering from poor credit and you would like to increase your
credit score so that you can get better interest rates on loans/mortgages, you
convince someone to put your name as an authorized user on their credit card. This
person who would be putting you on their card needs to have a good credit report
now their good credit rating is then becomes included on your credit report
and positively affects your score. The system further simplifies itself because
the person with bad credit who is added as an authorized user of good credit
does not ever even have to use the credit card. The card can simply be held by
the person allowing someone to piggyback on their credit or even destroyed. But
it is the name being added as an authorized user that makes the difference.
The practice is seen by some as the new way to improve your
credit score easily but others are not so sure. There seems to be a cloud of
fog surrounding it regarding if it is legal or not and how far it can be pushed.
What is actually being accomplished is that someone is faking a good credit
score. They don't actually deserve the better score they are obtaining. Some say
it is illegal claiming that in practicing credit piggybacking there could be
a violation of the Credit Repair Organizations Act or committing bank fraud. Yet
others are saying it is legal and more like a loophole to easily increase your
credit score. Don't be surprises however if the Federal Trade Commission pushes
to make changes nullifying this benefit.
Regardless there is/was a company that is seemingly
no longer in the practice that would pair up people willing to take part.
They would charge $900 to the individual with poor credit and they would find
someone with good credit and pay them $150 to simply allow the other party to be
an authorized user of their account but never actually have access to it as the
new credit card would be delivered to the company and destroyed. Another risk
of this practice is if the person who is lending out their credit card then becomes
delinquent on their payments. This will also show up on the borrowing members
credit report so if one chooses to participate in this practice, they would
need to trust the other member. Due to more recent restrictions, this process
is more difficult to pull off and is limited in its effectiveness compared to
what it was was.
Our recommendation is to seek
out a BBB certified company to better your credit report. Preferably one with a
Solid Better Business Bureau rating and charges a fraction of what this other
company was charging and offers a completely unconditional guarantee. It seems
like an easy choice when you consider this.
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