Should You Lend Your Good Credit?

If you're in the position to lend someone money you may also even consider lending your good credit, but is that a good idea? A popular, yet not new trend called "piggybacking credit" is not a good idea. There are numerous online companies offering individuals with poor credit the ability to increase their credit score for a fee. So, how does it work?

The companies charge the individuals a fee for increasing their credit score. Their score is increased by utilizing the piggyback method. The person with poor credit is added to a credit card account as an additional user. The credit card account belongs to an individual with good credit. The person with the good credit is paid a fee for allowing the other individual to be added to their card, but the person with the bad credit is not given a card, nor are they provided the name of the individual who added them to their account.

Sound phishy? If it doesn't it should! Although you may be willing to add your young adult child to your credit card account for them to gain a better credit standing, why would you risk your good credit for a stranger?

The companies that are promoting the "piggybacking credit" method claim it will not harm the credit of the individual who is paid to add another user onto their card, but is that really true? I say they are wrong!

The first obvious point of concern is the fact that the individual with the good credit must surrender proof of having a good credit standing. This of course means they are going to surrender their credit history to the company promoting the piggybacking strategy. I don't know about you, but I want to protect the confidentiality of my credit history, not provide the history to a third party at any time it is not necessary!

The second point of concern is the fact that the companies promote the thought of paying the individual with good credit x amount of dollars for each user they add to their cards. So, that means the more credit cards the person takes out, the more they potentially can be paid. This strategy is a very dangerous one with a slippery path for damaging the individual who had good credit to begin with. For each credit card or open account one has it lowers ones FICO score. So, why would one with a good score want to risk lowering it in order to establish more accounts so they can get paid to add more users? This is NOT a smart way to make extra cash, and in the long run lending your good credit will most likely do nothing but harm you.

It may also be just a matter of time for ones credit to be dinged for every additional user that is established on their accounts. That would seem to be a good strategy in order to protect the lenders who rely on a credit score established the honest way.

Essentially an individual who establishes good credit through the method of piggybacking has done so in a seemingly fraudulent manner. With the piggybacking credit method, it seems the mortgage industry is not only potentially defrauded by those who practice piggybacking, but also by the credit rating agencies who allow ones credit to be boosted by piggybacking strategies.

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