Piggybacking is back in, baby. FICO was all set to terminate the credit-score boosting technique of adding another authorized user to an account held by someone with good credit, but they demurred. Piggbyack away, little money pigs. Here’s how it went down…
CreditCards.com reports that FICO announced it changed its mind during Congressional testimony yesterday.
Back in the day, adding an authorized user to your account was mainly used by parents to help their kids develop better credit scores. As the housing bubble ramped up, private credit score boosting companies would “rent” authorized user slots to strangers with poor credit so they could qualify for loans they shouldn’t have. It was a contributing factor to the subprime meltdown. When FICO developed a new scoring system, FICO 08, in direct response to the credit checking industry’s failure to accurately check and score credit, they said they were going to kill piggbyacking.
“Fortunately, we were able to come up with technology that makes it much harder to game the system,” said Mike Campbell, FICO COO.
That’s good news for responsible consumers looking to get better rates on their credit cards, mortgages, and other loans.