Piggybacking May Not be a Solution to Credit Problems

[Apr 30, 2007.]

Industry analysts are saying that a practice known as piggybacking may not be the best solution for individuals with credit problems.

Media reports indicate piggybacking - or becoming an authorized user on someone else's credit card - has become a popular Internet practice. Once an individual pays a set fee, he or she can be authorized as a user on the charge card of someone who has a stellar credit rating. The individual is not permitted to use the card, but the card's history will appear on the person's credit report, helping to improve his or her credit score.

A number of sites on the World Wide Web promise nearly instantaneous improvement of the credit scores of those who sign up to piggyback. As a result, those individuals are promised superlative interest rates on loans. However, a piggybacking move can cost a consumer thousands of dollars. A consumer may be tempted to agree to the plan because he or she can pay the debt over time. The credit histories involved may reflect as many as three decades of on-time payments, making them a particularly attractive commodity.

While the sponsors of piggyback sites say the practice is legal, some consumer watchdogs contend that the practice constitutes fraud and can lead to identity theft. And, although this may be a murky area of the law, prudence would suggest that the wise consumer steer clear of such deals, which appear on the surface to be too-good-to-be-true.

In addition, credit experts note that the best way to repair credit is simply to avoid missing or late payments on bills…to make it a priority to pay bills on time…and to attempt to whittle down your credit card debt whenever possible. That way, an individual can earn good credit in his or her own right, rather than try to piggyback on the shoulders of someone else.

Julie-Ann Amos
30th April 2007

More Information:

• Credit Repair Does Not Begin with Transferring Balances
  If you find that your current credit care statements are overwhelming, those balance transfer offers that you receive in the mail can become quite tempting. Their offers of lower interest rates as well as a chance to lower your monthly minimum fees can seem like a relief.


• Steps You Can Take Today to Start Rebuilding Your Credit
  While it can seem impossible to dig yourself out of financial trouble, the truth is that you didn't get here overnight. Your debt accumulated over years and years, most likely, so while the road to debt freedom may be long, it's not a road that will go on forever.


• Ways to Avoid Paying Fees on Your Credit Cards
  The last things you need when you're trying to rebuild your credit are more fees on your credit cards, adding to your already too-high balances. What you need to do is learn some basic tips on how to avoid these fees and only pay for what you're bought in the first place.

• FTC's views on credit


• Identity Theft (FTC site link)


• Freeze your credit files