Debt Free

“What can I do to raise my credit score?” is one of the most asked credit related questions. That’s great, because it should be. Your credit score has a greater impact on your personal finances than almost anything else. It will be the main factor used to determine the rate you pay for financing on your home and car, the interest rate on your credit cards, and in some cases, the documentation you need to provide when seeking financing. 

There are several techniques that work well to raise your credit score. One of these is called piggybacking. As you might have guessed from the name, piggybacking refers to the practice of using someone else’s credit to help your own. It works best in situations where you have very little credit history. In suchb cases, your credit score will be fairly low, because payment history comprises roughly 35% of your credit score, and how long you have used credit makes up an additional 15%. So, if you haven’t used credit much, either because you’re young, or because you’ve been married and most of your credit has been in your spouse’s name, about half your credit score can be helped by just adding something. Anything. Really.

You just need to have a credit history that your score can be based upon. Piggybacking is typically used by getting added as an authorized user on someone else’s credit card or other revolving account. When you try this, make sure you check with the credit card company to be sure your payments will be reported.

This technique has worked so well that companies were started just to match up people in piggybacking relationships (for a fee, of course). It’s gotten so popular that the popularity of this credit boosting technique could very well be its downfall. FICO has indicated it is going to deemphasize piggybacking effects from their credit scores on it’s newest credit scoring algorithm. That will get rid of those who have been getting a big boost to their credit scores by essentially renting other people’s credit histories, but it will also tank legit users of the piggybacking strategy, such as college kids being authorized users on their parent’s credit cards. This has been done for years to help kids develop a solid credit history. What to do now??