piggybacking - does it work?

[Duncanrr]

1. Does piggybacking work, 2. Has anyone tried it, 3. What kind of impact does it generate and how long to see results; and 4. What happens to score after they are removed from the other person's card (say how much of a hit would they take if no longer authorized after 8-12 months)?

[rckstrscott]

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@Duncanrr wrote:
1. Does piggybacking work, 2. Has anyone tried it, 3. What kind of impact does it generate and how long to see results; and 4. What happens to score after they are removed from the other person's card (say how much of a hit would they take if no longer authorized after 8-12 months)?

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Piggybacking is referred to on this forum as being an AU (authorized user)

Most of us who are rebuilding, if we have the opportunity, will try to become an AU on someone elses card; at least for a while. I was an AU for 2 years on a card while I rebuilding

AU accounts are scored the same in FICO terms, so if you have 0 credit, being added an AU could help immensely depending on the circumstance. For example, you have those two secured accounts. If you added an AU account thats 15 years old, with low utilization, your scrore would likely go up a ton, since your AAoA would go up, mix, ect ect..

The benefits can be awesome, and they are easy to remove if the AU account holder gets crazy with their credit.

On the flip side, it is kind of like 'fools gold' when it comes to lenders, and some lenders will not factor AU accounts..

-scott

[Duncanrr]

Well I'm considering asking relative to do this with their platinum Amex card. It has about 8 years on it, in perfect condition, and with Amex I was told I have to give ssn which would like our cr on this card. The main thing I was thinking was this would help me get better unsecured card faster. My concern is if I drop au on the card would the new card drop me? And what impact would it have on my scores.

[rckstrscott]

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@Duncanrr wrote:
Well I'm considering asking relative to do this with their platinum Amex card. It has about 8 years on it, in perfect condition, and with Amex I was told I have to give ssn which would like our cr on this card. The main thing I was thinking was this would help me get better unsecured card faster. My concern is if I drop au on the card would the new card drop me? And what impact would it have on my scores.

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Well, I am unsure about the Amex part... does that card have a limit? Ideally, you'd want a card with a decent limit, that has very low utilization, and is old enough to increase your AAoA --- if you add yourself to an 8 year old card, then your AAoA should be over 2 years, which is better than where it is at now, at 0 years.. haha

When you drop your AU off your reports, your reports will go back to how it was prior to the AU.. as far as credit card companies dropping you? I don't know about that.. I had an AU card, got a couple unsecureds, and then dropped the AU..

But you don't have to drop the AU if they don't use this card often, you can keep it on there to keep the score boost until your score is ready to handle to removal.

Most AUs ask for SS number.  They use it to report.. AMEX might be different, so they might do a pull, but I am unsure..

It will help you get credit faster. I had 0 accounts, added an AU, and got a secured card, and in 3 months I was able to get my first unsecured.

-scott

[RobertEG]

In addition to the issue of some credtiors not wanting to "factor in" the effects of the credit history of another in their decision making, if they wish to discount the effect of the AU, they really have no way to "factor it out."    They have no means to produce a FICO score that excludes that information.

The result may be their discounting of the importance of your entire FICO score in their decision making.

[DJH87]

My niece was put on my Amex as an AU on an account back dated 25 years. Her fico scores obtained here were 790/ 801. She applied for Amex revolver, was approved, received a low limit and the worst apr. Her reported score was 675 by Amex scoring. She has no open installment loans and only one secured credit card and a close personal loan from her CU. We believe the AU account was discounted in the Amex scoring model. The good news is she was approved and her account was back dated to when she was placed as an AU on my account.

[rckstrscott]

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@DJH87 wrote:
My niece was put on my Amex as an AU on an account back dated 25 years. Her fico scores obtained here were 790/ 801. She applied for Amex revolver, was approved, received a low limit and the worst apr. Her reported score was 675 by Amex scoring. She has no open installment loans and only one secured credit card and a close personal loan from her CU. We believe the AU account was discounted in the Amex scoring model. The good news is she was approved and her account was back dated to when she was placed as an AU on my account.

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Many lenders have their own variations, and RobertEG is right, the AU status can create odd and misleading representations of one's credit score.. Keep in mind though, AMEX uses Experian, and its quite possible her EX was 675, because you don't know for sure because consumers cannot purchase their EX score.. but AMEX scutinizes more than most, and your assertion could very well be accurate..

But its almost irrefutable... if you have no accounts, or limited credit, and you add an AU account or two with a long life span and low util, your FICO will enhance... its done over and over and over again.. The ethics regarding AU accounts, the way lenders will view you, ect ect all have valid arguments, but if the OP wants to enhance FICO, adding an AU will do that in this scenerio, I don't have ANY doubt about that..

-scott

[Duncanrr]

I guess what I'm really asking is this, given my goal of refi in 12 months or so and the fact that I have no revolving credit history showing on reports, will I be better off at the end of the day adding an AU for 6-12 months?  If the answer is that I will get a spike in scores that doesnt really get factored in (other than my ego of seeing an inflated score) then I'll not investigate this further.  If my spike allows me to get a good unsecured card and when all is said and done a 20 or so point bump (from having this better unsecured card for a year on my own prior to refi) when the AU is off my report because of adding the AU then I may do it.