Opening an account with a cosigner or guarantor is one way to piggyback on someone

What Is Piggybacking for Credit?

What is credit piggybacking? If you’re not sure what this strange term could possibly mean, you’re definitely not alone.

Credit piggybacking, also referred to as “credit card piggybacking” or “piggybacking credit,” is a commonly used credit-building strategy. However, many people are still unaware of how to access this strategy and use it to their advantage.

In this article, we’ll define what piggybacking for credit means and how it can help your credit.

Credit Piggybacking Definition

The general definition of credit piggybacking is building credit by sharing a credit account with someone else. For example, spouses, business partners, and parents and children are all common examples of people who often share credit.

There are three main ways in which credit piggybacking can take place, which we discuss in more detail in “The Fastest Ways to Build Credit”:

Opening an account with a cosigner or guarantor is one way to piggyback on someone's good credit.

Opening an account with a cosigner or guarantor is one way to piggyback on someone’s good credit.

  • Opening an account with a cosigner or guarantor, which is someone who promises to be responsible for the debt if the primary borrower cannot repay it. If the cosigner or guarantor has good credit, the borrower may be able to qualify for credit that they could not qualify for on their own or qualify for better terms.
  • Opening a joint account with another person, which means both parties have full access to the account and are both held fully responsible for the account. By opening a joint account with a partner who has good credit, a person with less-than-ideal credit may be able to open an account that they wouldn’t have qualified for on their own or get more favorable terms.
  • Becoming an authorized user for the purpose of credit card piggybacking, meaning you are not responsible for the debt, but the entire history of that account may be reflected in your credit file, regardless of when you were added to the account.

When people talk about piggybacking credit, they are usually referring to the method of piggybacking using authorized user tradelines.

How Does Authorized User Piggybacking Work?

Here’s how piggybacking works as an authorized user:

  • When you are added as an authorized user to someone’s credit card, often (depending on the bank), the full history of that account will then be shown in your credit report, regardless of when you were added to the card.
  • Therefore, piggybacking can almost instantly add years of perfect payment history to the authorized user’s credit file.
  • Authorized user tradelines can affect many important credit variables, such as your average age of accounts, age of oldest account, overall utilization ratio, number of accounts, mix of accounts, and more.
  • Historically, only the wealthy and privileged were able to use piggybacking as a credit-building strategy. Now, there is a marketplace where tradelines can be bought and sold, which is helping to democratize the credit system and provide equal credit opportunity.

Be sure to read the other articles in our Knowledge Center to get all the details on how tradelines work.

Piggybacking went all the way to Congress, which upheld consumers’ rights to use authorized user tradelines.

The issue of piggybacking went all the way to Congress, which upheld consumers’ rights to use authorized user tradelines.

Is Piggybacking Credit Legal?

While Tradeline Supply Company, LLC does not provide legal advice, we can provide evidence that supports the idea that piggybacking credit is legal.

Firstly, piggybacking for credit is an extremely common practice that has been in use since the advent of credit cards. Studies estimate that 20-30% of Americans who have credit records have authorized user accounts in their credit file.

In addition, about 25% of people who have credit reports initially established their credit files by piggybacking in one way or another.

Many banks actually encourage consumers to add authorized users for the express purpose of boosting their credit scores.

You may have heard about FICO trying to take away authorized user privileges in 2008. But what you probably didn’t hear about was FICO backing down after a congressional hearing that involved the Federal Trade Commission and Federal Reserve Board.

During the hearing, FICO admitted that they could not legally discriminate between spousal AUs and other users, because this would unlawfully violate the Equal Credit Opportunity Act.

Since the U.S. Congress has upheld consumers’ rights to use authorized user tradelines, it seems reasonable to conclude that authorized user tradelines are legal.

For more information on this topic, check out our article, “Are Tradelines Legal?

However, it is important to get your tradelines from a reputable source. Some tradeline companies use illegal credit profile numbers (also known as CPNs) to mislead creditors as well as consumers. That’s why consumers should only work with tradeline companies that don’t use or sell CPNs—learn more about CPNs and why Tradeline Supply Company, LLC does not accept them.

Does Piggybacking Credit Still Work?

As we discussed in “Do Tradelines Still Work in 2020?”, credit piggybacking still works, and we think it will be around for a long time.

Piggybacking credit is a well-established credit-building strategy that has been defended in Congress and promoted by banks. It is a significant part of our credit system.

Thanks to the Equal Opportunity Credit Act, authorized user tradelines are still a very important factor in credit scoring models.

Not only that, but even if FICO were to devise an algorithm intended to exclude piggybackers, it would be quite some time before lenders could implement it on a large scale. The slow-moving financial industry is still using FICO scores that were developed decades ago.

Piggybacking companies bring together buyers and sellers of authorized user tradelines.

Piggybacking companies bring together buyers and sellers of authorized user tradelines.

What Do Piggybacking Companies Do?

Friends and family will often allow each other to piggyback, but for many people, it’s difficult to find someone with good credit to piggyback on. A third party can play a role in helping to connect people who are looking to purchase seasoned tradelines with people who have high-quality tradelines to offer.

Piggybacking companies, more commonly referred to as tradeline companies, simply facilitate the buying and selling of authorized user tradelines.

The tradeline company acts as an intermediary by marketing the tradelines to consumers, protecting the identities of the clients, and preventing fraud.

At Tradeline Supply Company, LLC, we provide an innovative platform through which users can buy and sell tradelines entirely online. We also provide educational resources so consumers can familiarize themselves with the credit system and how piggybacking works.

How Long Does Piggybacking Credit Take Before I See the Tradelines on My Credit Report?

The account you are piggybacking on can show up on your credit report in as little as 11 days, depending on several factors relating to the particular tradeline.

Each piggybacking tradeline has its own reporting cycle, and Tradeline Supply Company, LLC provides a “purchase by date” before which you must purchase your tradeline in order for us to guarantee that it will post in the coming reporting cycle. If you miss the purchase by date, it will simply show up in the following cycle.

If you have purchased a seasoned tradeline that you believe has not posted, first, check to make sure that the entire reporting period has passed, then check your credit reporting service again to verify that it still has not posted. If you take these steps and determine your tradeline has not posted, please reach out to us for support and we will rectify the situation.

Can Piggybacking Hurt Credit?

If credit piggybacking is done incorrectly, it can actually backfire and hurt your credit.

Piggybacking for Credit

Because the full history of the credit account is reflected in the credit file of the piggybacker, that means any derogatory factors will show up, too.

For example, if the account has any late or missed payments, that could hurt the authorized user rather than help. Similarly, a high utilization ratio on the account could also damage the authorized user’s credit.

That’s why we recommend going with a reputable piggybacking company who guarantees a perfect payment history and a low utilization ratio (15% or lower) on all tradelines. This will virtually eliminate the risk of your credit being hurt by these factors.

The only other way piggybacking could hurt your credit is if you choose the wrong piggybacking credit card. It’s essential to choose the right tradelines for your credit file. To do this, you’ll need to figure out your average age of accounts and how adding a tradeline could affect this statistic.

For example, if your average age of accounts is five years and you decide to piggyback on a tradeline that is two years old, this would bring down your average age of accounts, which is the opposite of what you want to achieve with tradelines.

For this reason, it’s important to use our tradeline calculator to see where you stand, and to check out our tradeline buyer’s guide before you choose a tradeline.

Let us know if this article on piggybacking for credit helped you, and please share it with your friends!

Why Choose Emergency Loans in Adverse Financial Situations?

At times, much to your surprise, you may find yourself financially entrapped in the middle of the month, before you could receive your next paycheck.

In such a financially threatening condition, the immediate assistance that you could think of would be a loan from a reliable loan company or family and friends.

But, if all your backup ideas fail and resources, it would be more than appropriate to turn to an online loan lender for help.

There is nothing to panic about when getting a loan. People do experience such unexpected situations of desperate financial need at least once in their lifetime and everyone can try to get hold of emergency loans in the market.

When you’re in need of emergency loans to cover up your emergency expenses it’s important to understand that lenders can be of great help. They involve quick process during preliminary approval stages and chances of your loan application getting rejected are relatively low. Choosing a short-term loan product for emergency needs is one of the best ways to get out of financial emergency.

The main fact that you could always keep in mind is that these emergency loans were designed for people that have a steady job and generate monthly income to meet their emergency financial needs.

They are meant to be repaid in small cycles or possibly with your next paycheque. The worldwide accepted truth is that not all people from different classes are self-secure to meet sudden sky-rocketed monthly expenses. The best option for them is to apply for emergency loans that have less processing and approval time.

Emergency car title loans offer cash as at when you need it, which will assist you to tackle the situation without any worries or delay.

With the amount received you can fix your washing machine or car, pay your medical bills or whatever the emergency need maybe. After applying for the loan, you could receive the funds on within 24 hrs.

The main benefit of getting emergency loans is the hassle-free process that is involved in getting them. Another major point to note is that it does not matter if you ever had a bad credit record history because these loans are 100% credit check free. Emergency loans are meant for emergencies and you won’t even have to tell the lender the reason you’re borrowing the fund.

Furthermore, the amounts provided in the loan market start from $100 and could go up to $5000, with repayment cycles varying between 1-6 months, making this the best way to meet an immediate need.

To qualify for the loan, you would need to have a working bank account and be a resident of the United States of America.

The other important requirements are; you should be in a monthly paying regular job and you must be at least 18 years of age. But, the only disadvantage here is that most of the online lenders do not approve a loan for people who don’t have a job.

Credit Card Processing: The Working Mechanism Behind the Whole Process

Having the intimate knowledge about the inner-workings of the bankcard system is not mandatory but then there’s no harm in knowing it. Understanding how things actually work is a good approach, as fees are incurred at times at one or the other stage. The main components in the whole process involve:

1. Key players
2. Credit card authorization
3. Credit card clearing and settlement

Credit card processing services are so quick and timely that within few seconds, transaction details are transferred from the terminal to a processor. Later, this information is passed through the card network to the issuing bank. Once all this happens, the issuing back sends an authorization back to the processor via the network.

In the whole system, obtaining an authorization for a transaction remains the first step. Before the sales are deposited in the bank account of the business, it is necessary that the authorizations are settled. Settlement and authorization are the two major processes of transaction. If ever this happens a failure be it complete or partial, it leads to sales not deposited or increased costs.

The Key Players

Key players involved in authorization and settlement include:

1. Customer
2. Service Provider
3. Acquiring Bank
4. Issuing Bank
5. Card Associations (Visa and MasterCard)

Let’s discuss every player one by one.

1. Cardholder: This term refers to the one who gets a credit or debit card from an issuing bank. The card is then presented to the merchants as payment for the services or products.

2. Service Provider: Service provider is the business that is engaged in the sale of services or products. It can also be said that it is a business that allows accepting credit as well debit cards.

3. Bank of the service provider: It is often referred as an acquiring bank. This is because it creates and maintains accounts and enables businesses to accept credit and debit cards. Moreover, these banks provide software and tools to accept promotional materials, cards and other important elements needed in card acceptance to the merchants.

4. Issuing Bank: An issuing bank provides credit cards to the customers. It is important to know that this bank is a member of the card associations. These banks pay the banks for the sales or purchases made by their cardholders. Repaying the issuing bank as per the norms of card agreement is the responsibility of the cardholder.

5. Card Associations: As MasterCard and Visa are not banks, they serve as a guardian and clearing house for their card brand. In addition, they monitor the community of ISOs, MSPs and financial institutions that work jointly to support credit card processing and electronic payments.

This was all about the important parameters of credit card processing. To keep transparency in the credit card processing mechanism, keeping these important points in mind is quite helpful.

Understanding the Importance of CIBIL Rating & Ways to Improve It

A credit rating is nothing but a number, which is computed by an approved credit rating agency. These days the masses are more conscious than that in the past. It is because of this risen awareness that jargon like credit rating and CIBIL score are heard often across almost every tier of the society. The rating or the number actually provides a hint of an individual’s credit worthiness. This score proves to be a crucial tool for conventional lending agencies while processing or approving a loan application of an individual. Before borrowing the money, creditors need to have an indication of the probability of default of every loan seeker who approaches them, for obvious reasons.

There is still a way of explaining the importance of credit score. Flatly, it tells a lender or credit institutions like banks, how likely is it that a borrower will repay a loan based on the individual’s

  • Pattern of credit usage in the past and
  • Loan repayment history

It is possible for every individual to check his or her own credit history. In order to check the history, one should obtain a copy of one’s credit report. In India, one can avail this from any of the three rating agencies, namely CIBIL, Experian or Equifax. The records include every loan or credit account that one has along with detailed information of the concerned individual’s entire payment history. Thus, the credit score is calculated based on a person’s financial track record as noted in the individual’s credit report.

Thankfully, it is possible to improve one’s CIBIL score. However, one should remember that there is no quick-fix procedure to achieve this overnight. It takes some time for the process to take effect. But, it is possible to improve one’s score significantly within a short time frame and to achieve it one has to adhere to a set of rules. As such, it is an excellent habit to check one’s credit scores at regular intervals so that one remains updated about one’s financial health in a periodic manner.

As the first step towards improving one’s CIBIL rating, one should keep the credit card balance as low as possible. A higher credit limit allows an individual more flexibility in making payments and also helps in keeping the balances low. Setting up payment reminders proves helpful in avoiding missing payment deadlines. Credit score drops because of missing payment deadlines. In this age of digital technology, it is pretty easy to ensure the monthly balance paid automatically through electronic transaction directly from one’s bank account. Moreover, one can have the bank shoot timely reminders through SMS or emails as well. If one spends over 30% of one’s credit card limit on monthly basis across all existing cards, it negatively affects the individual’s credit rating. So, ask for higher credit limit and maintain or cut down the monthly expenditure below 30% of the credit limit. This is an effective means to improve one’s credit score. In fact, improving one’s credit score is not impossible, provided one sticks to the right strategies with dedication and involvement.

Personal loan india

Personal loan is one of the best loans that are provided to the people. The only term and condition that is associated with the personal loan is that it is provided only to the salaried individuals. It is important that you choose the best bank which will provide you loan at the best rate of interest. When you get loan approved at an attractive rate of interest, the interest amount that you have to pay every month as EMI will be a genuine amount and affordable too.

You can apply for personal loan when you want to use it for wedding, personal expenses, medical needs, travel and other kinds of emergencies. Whenever you need money at the end of the hour, you can apply for personal loan in order to fulfil your dreams and wishes. The bank which demands for the least documentation for application of personal loan, is considered to be the most preferred bank throughout the world. The interest rate which is issued for the personal loans differs from bank to bank. Immediate financial requirements seek for the immediate application of personal loans. When you apply for a personal loan, make sure that the rate of interest is comparatively low. There is a significant difference in the rate of interests of different banks. Never underestimate the interest rate when you are applying for loan. Even a slight difference in the decimals, will cost you a large emi amount. The best option that the personal loans offer is that there is no compulsion for the collateral. Personal loans are secured loans so there is no need to worry about any loss. Long list of documentation is always a reason to create fuss. The banks should realize that less the number of documents required, less will be the tension and fuss that will be created in the minds of the people who are applying for loans. People who are applying for personal loan should realize that if they choose for a long tenure, the emi amount that will be assigned to them for each month will be comparatively less than the emi amount which will be sanctioned for the less tenure cases. Choose the tenure after analysing your present and future financial situations. Always choose the bank which will charge you with less processing fees. Try avoiding the banks which will ask you to pay a high amount of processing fees.

When you apply for personal loan, try keeping all these above mentioned points in your mind. It is important that you choose the best personal loan plan for you which will not put you in burden but help in fulfilling your dreams and needs.