What is ‘Piggybacking’ and how can it
help your credit score?

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 simply authorize the bad-credit individual on one or more of their credit lines, thereby artificially boosting the bad score and making it appear that the person with the bad score actually had several lines of good credit.

Good intentions of piggybacking credit

It may sound a little shady, but the intentions of piggybacking are often good – a parent helping one of their children to begin establishing good credit, a spouse helping to boost their partners score, and so on. 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.

A Congressional hearing on Credit Repair

FICO, along with the three major credit bureaus, testified in a congressional hearing that was largely educational. Committee members questioned and heard testimony from the credit bureaus about the methods used to determine a person’s credit score and the benefits of quantifying, or measuring and scoring, a persons credit risk. The committee also questioned the bureaus about alternative methods of credit scoring, the differences in the models used by the bureaus, and the end cost to consumers of purchasing credit scores.

The major point of discussion revolved around the practice of piggybacking, its benefits to consumers in repairing their credit, and the abuses that continue to undermine its credibility as a credit repair solution. At the end of it all, the decision was made to hold the introduction of the FICO 08 model until a method for compensating for the abuses was developed.

Making it harder to ‘game’ the system

As a result of the decisions made in the congressional hearing, FICO and the other credit bureaus have developed a solution. "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 of repairing your credit. 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 method for repairing your credit and boosting your credit score.