Why You Should Decide Against ‘Piggybacking’ for Credit Repair

Low key macro shot with old credit card

Some people with low credit scores have considered “piggybacking,” which involves spending money to buy better credit. However, this strategy is no longer effective and it could put your personal information at risk.

The possibility of identity theft happens since you need to give your Social Security number before you become an authorized user on another person’s credit report. Remember that when you buy better credit and apply for a loan right away, the bank or financial institution could reject your application.

Credit investigations have been stricter, and some may even file a lawsuit based on the grounds of providing false or fraudulent information.

When is Piggybacking Acceptable?

Piggybacking can be considered an acceptable move when parents add their children as authorized users to their accounts. Several banks allow this practice, but it’s a different story when an unrelated individual suddenly appears on another person’s credit history.

What are Some Alternatives?

Another alternative to piggybacking requires a tedious yet safe approach. You would need to find out if your credit report contains wrong or inaccurate information, which could be the reason for having a low score. According to a Federal Trade Commission study, around 5% of credit consumers unknowingly have erroneous data on their credit reports.

While you could do this by yourself, it’s possible to pay someone and fix the problems especially when you have several years of credit history. It may cost an average of $100 per month, although the actual price varies based on where you live in the U.S. For instance, a person who signs up for credit repair in Miami, FL may spend a different amount compared to another individual in New York.

It’s easier to find a credit-repair service by browsing the Internet. However, you should look out for companies that offer unsubstantiated claims. These include removing negative marks on a person’s records and creating new Social Security numbers. Beware of those who also ask for payment before rendering their services.

What can be Fixed?

man inputting his credit card details online

Some of the common mistakes on a credit record include bankruptcy cases or other legal matters that are wrongfully filed under your name. Your credit report may also contain accounts that you don’t own, missing positive marks if applicable, or even misspelt names. Credit repair usually takes several months, but it shouldn’t last for more than a year.

Once you decide on hiring a third party to repair your credit information, you should have an estimate of the total cost and timeline of results based on the Credit Repair Organizations Act. This law also provides you with the right to cancel the service for free within three days after signing an agreement.

The U.S. government still has no official ruling against those who sell or buy better credit. However, credit scoring systems have become more complex. FICO’s own evaluation also adapted with this loophole to help the lending industry with identifying piggybackers, so it’s better to improve a poor credit history by fixing any inaccuracies and settling unpaid debt as soon as possible.

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