What Is Credit Piggybacking and Does It Work?

Building your credit from scratch isn’t always easy: It’s hard to qualify for a traditional credit card without much of a credit history, and hard to build a history without a card.

Credit piggybacking is one way to get around that a little faster. Someone with good credit adds you to their account, and their history starts showing up on your report. But you’ll need a creditworthy family member or friend who’s up for the task. And it comes with real tradeoffs worth understanding first.

What is credit piggybacking?

Credit piggybacking is when you become an authorized user on someone else’s credit account. It’s a strategy that adds that person’s credit line to your own credit report, which can strengthen your credit score if the primary account holder has a good credit history and financial habits.

Parents often use this hack to help their teens build credit, since you generally need to be 18 to open a credit card on your own. Even then, until you turn 21, you’ll need your own income or a cosigner who’s at least 21. But anyone can use piggybacking to establish a strong credit file.

Read more >> How Long Does It Take to Build Credit?

How credit piggybacking works

Piggybacking credit is a straightforward strategy with five key steps.

1. Find someone with strong credit. Focus on a parent, family member, or trusted friend who uses their account responsibly. Missed payments or a maxed-out card on their end will end up on your report too.
2. Ask to become an authorized user. If the accountholder says yes, you provide your full name, date of birth, address, and Social Security number, and they contact their card issuer to add you to the account. Once you’re added, the account should appear on your credit report, though some issuers report the account only from the date you were added, rather than the full history. It’s worth asking the issuer for details.
3. Receive your own card. You may get a credit card in your name that’s linked to the account that you can use for purchases. But the primary account holder receives the bill and is responsible for paying it. You’ll need to reimburse them for any purchases you make.
4. Watch good habits become your history. If the primary account holder pays their bill on time and keeps their credit utilization low, that positive activity can help build your own strong credit.
5. Come off the account when you’re ready. When you’re ready to take off the training wheels, the primary account holder can remove you as an authorized user. At that point, your credit may be strong enough to qualify for a credit card on your own.

Read more >> What Happens if You Don't Pay Off Your Credit Card?

Benefits and drawbacks of credit piggybacking

This strategy can offer a simple way to establish credit for the first time or rebuild a less-than-perfect credit score, but it isn’t right for everyone.

Read more >> How to Remove an Authorized User From a Credit Card

Is credit piggybacking legal?

Yes, being added as an authorized user by someone you know is perfectly legal. The primary account holder is agreeing to add you to their account, allowing you to piggyback on their good credit. They have the right to remove you at any time.

Paying a stranger to add you to their account is a different story. Those arrangements violate most card agreements, and using one to get credit you wouldn’t otherwise qualify could be construed as fraud.

Alternatives to credit piggybacking

Not everyone has a creditworthy friend or family member who’s willing to add them as an authorized user, though there are alternatives to consider.

Secured credit cards

A secured credit card works like a traditional credit card, but with one key distinction: It requires an upfront security deposit. This amount typically determines your credit limit. So if you put down $500, you’ll likely have a $500 credit line. Just be on the lookout for fees before opening a secured credit card.

If you use the account responsibly, and the credit card issuer reports your account activity to the three major credit bureaus, that positive payment history can help strengthen your credit score. You’ll get your security deposit back when you close the account or upgrade to a traditional credit card as long as your balance is paid in full. Some creditors automatically upgrade you if you’ve consistently demonstrated good credit habits.

Credit-builder loans

Think of a credit-builder loan as a loan in reverse. Instead of receiving your funds upfront, you’ll make monthly payments for a predetermined amount of time. The loan amount is held in a savings account until you’ve satisfied your loan term. At that point, the money becomes yours free and clear. Just be aware that interest and fees can add up.

Credit building accounts

A revolving credit account accomplishes the same goal without locking up your money. There’s no deposit, and nothing is held in savings. Instead of borrowing a lump sum, you make regular payments on a line of credit. The provider reports on-time payments to the credit bureaus, which gradually builds your credit. Kikoff offers one, with plans starting at $5 a month.

Bottom line

Credit piggybacking is a legit way to start building credit or work toward improving a poor credit score, but it isn’t a guarantee, depending on the primary cardholder’s habits. That person’s activity can hurt your credit score as easily as it helps. And even if they use their card responsibly, lenders may still hesitate to approve you for your own.

That’s the limit of piggybacking: the history isn’t yours. Start building your own with Kikoff’s Credit Account, which reports your on-time payments to all three credit bureaus, no hard credit check required. Every on-time payment adds to a record that’s yours.