When the debtor is added as an authorized user to someone else's credit account then, the whole credit history gets included in the credit report of the debtor. Usually, the parents use credit piggybacking in order to help their children in building their credit history.
This practice has been in use for a long time. Credit card piggybacking has become an easy way for the people with bad credit to raise credit scores. They can simply become an authorized user to another's positive credit card account by paying a fee. As a result, their credit score increases. Thereby, they can easily get credit cards, loans with low interest rates which would have been impossible to get otherwise.
Effect of piggybacking on credit score
Fair Isaac has altered its FICO (Fair Isaac Credit Organization) scoring model. Previously, credit piggybacking used to increase credit score. However, according to FICO 08, credit piggybacking will longer boost credit scores.
There has been a lot of controversy regarding credit card piggybacking. Therefore, financial experts don't recommend credit card piggybacking to the people with bad credit.
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