Piggybacking

[vanillabean]

I was wondering about the current state of piggybacking. Has the standard FICO credit scoring system managed to somewhat close this obscure loophole?

As for our household, I understand that it's likely best to let revolving accounts mature for some time before giving secondary cards to each other. At least a year, I would say. The longer, the better probably.

The dilemma is that we like everything jointly. Our first card, our only for many years, has the account holder as joint, so we tend to get sentimental.

[llecs]

Know that there's a reporting and legal difference between a joint account vs. an AU account. If your first card is reporting joint, it would have the same impact on your FICO score as any other account, no matter what version of FICO score is used. Now for AUs, the versions here still count it. FICO 08 versions do too, but, from what I hear, it factors out obvious, unrelated piggybackers. Other scoring systems like Vantage have completely removed AUs from scoring.

[RobertEG]

I am not sure of your question.

If an account is issued with joint account signees, both are equally obligated.  Who has cards and assumes reponsbility to post balances is between the account holders, as a personal matter.  What one does, the other will be obligated for, both in credit scoring, and in default on any debt accrued.

That is not "piggybacking."

Piggybacking (AU Status)  is your approval to give to someone who is not a signatory to the account  either the benefit of your prior credit history without their legal obligation as a signatory to the account, or their abilility to charge on the account, and therafter just bail out.   No responsibilty for repayment of debt on the account.  I would never, ever, give anyone AU status that included access to make charges on the account.

You cant just authorize AU status, and extend the charitable use of your credit history, but dont give them account access.

That must be done through prior application with the creditor, and their approval. Theri consideration of approval of an AU is  a shot in the dark for them when considering their prior risk on the account.  Many simply now dont do it.

I dont like the AU process.  You earn a credit score, and should not be  granted one by the toils of another.

[vanillabean]

RobertEG, unless I'm mistaken (I could be), some cards don't allow for joint. (Or maybe it's just that the account holder status can't be changed to it later.)

In those cases, we as a married couple use AU to pretend we're joint. (We see no point in keeping our finances separate.)

So I view this variation of piggybacking as acceptable, whereas it's odd to assign AU of your 20 year old card to your 18 old child

[AndySoCal]

You are using the term "piggybacking' differently than I have seen it used. Both scenerios you have described are what I would consider tradiional uses of an autherized user.  The adding of a spouse to a credit card account or adding a child to a credit card account.  This has been done for many years.  The term "piggybacking" also has a negative meaning. There was a scam where people would pay other peole to be added as an AU to there credit card in order to boost their score. The latest version of FICO score is trying to correct the problem. AU you accounts are still considered in the FICO the impact of these types of accounts on the score may be less than in prior versions of score. 

[RobertEG]

"Conversion" from sole to joint is actually a total renegotiation of new legal contract terms with the OC.  They will normally, if approved, establish a new account, and may agree to transfter your old account history over to it, but that is not guaranteed.

CCCs dont pretend on who is liable for debt on what they lend.

From the OCs point of view, they are legally granting another party the extension of their credit, and will most certainly do a credit pull on both of you.

AU accounts are not, in the minds ot the creditor, a joint account, for if it goes into default, they cannot make a legal claim against the person who is only an authorized user, and not signatory, to the account.