Piggybacking and Credit Repair

The practice of piggybacking has been around for years, and many consumers have used it to boost their credit scores. In order for a consumer with bad credit to boost their score, a person with good credit would authorize the bad-credit individual on one or more of their credit lines which artificially boosted the lower credit score and making it appear that the person actually had several positive credit accounts.

Good Intentions of Piggybacking Credit

It may sound a little shady, but the intentions of piggybacking are often good such as a parent helping one of their children to begin establishing good credit or a spouse helping to boost their partner's score. However, a few years ago, several credit repair companies started taking advantage of this practice. For a fee, they would match people with bad credit up with people that had good credit and authorize them on one or more good accounts. The company charged a fee for this credit boosting service, with a percentage going to the party with the good credit and the firm pocketing the rest.

Does FICO Bar Piggybacking?

These abuses of the piggybacking method upset the Fair Isaac's Credit Organization (FICO) and lenders as well. After all, with artificially inflated credit scores, how could they accurately determine a person's credit worthiness and protect themselves from unnecessary financial risks?

As a result of these widespread abuses, FICO decided to bar the use of piggybacking when it revamped its credit scoring model for FICO 08, alleging that these practices basically amounted to fraud. Ultimately, this controversy resulted in a congressional hearing.

Making it Harder to 'Game' the Credit System

As a result of decisions made in a congressional hearing on piggybacking and credit repair, FICO and the other credit bureaus have developed a solution that still allowed for piggybacking, but with new considerations. "We worked very hard with the credit bureaus and lenders to find how important it was to how many people," says Mike Campbell, Chief Operations Officer for FICO. "Fortunately, we were able to come up with technology that makes it much harder to game the system."

Can Piggybacking Still be Used to Repair My Credit?

The simple answer is 'Yes', piggybacking can still be used as a method for credit repair. As a result of the FICO 08 revamp, it may be more difficult to exploit the system using piggybacking, but for now, it is still a valid and useful tool for improving your credit score.