Armageddon for Credit Card Piggy Backing?

by : Patrick Thompson

Many people that credit card piggy back are protesting the new pending change to this popular credit scoring system. The pending change will make it harder for people to polish their credit by piggybacking a card holder?s good credit score. Fair Isaac Corp. is the founder of the popular FICO credit scoring format.

The FICO credit scoring format may be unfair to the people who have worked hard on establishing good credit scores by paying off loans and credit cards. Patrick Thompson lead author at, says the FICO credit scoring is popular among people with bad credit because it easily allows someone with bad credit to be added to a credit card account of someone who has excellent credit. The person with bad credit is now recognized as a ?real card holder? with established credit. This act is deceiving to auto loan financing services and mortgage lenders because the lenders can?t differentiate between the bad credit person and the good credit person. This act of deception normally comes to light when the person with bad credit cannot make a loan payment. The persons credit score is investigated and is usually found through deep research that the person in default is in fact ?piggybacking? on another persons good credit.

While the practice of ?piggy backing? is not illegal, it often hurts the main credit card holder?s credit in the end. In most cases, the person ?piggybacking? jeopardizes the main card holder?s credit score by not making timely payments on a loan. The practice of piggybacking is usually contracted between family and friends. There are a few Internet websites that offer piggybacking services to people with bad credit. These Internet companies arrange for people with good credit to ?rent? their credit histories to people who want to increase their credit score. Many of these companies are being shutdown by the FTC and the Federal Reserve. James Wallace, a 39 year old carpenter recently testified before the Federal Reserve board on the FICO credit card scoring format. Mr. Wallace used to piggyback on a friends credit card history before regulators caught on to Mr. Wallace?s friends increasingly high credit score. Mr. Wallace testified that he was approved for two mortgage refinancing loans that he would have otherwise been rejected from. He was also able to be approved for an auto loan to purchase a $17,000 car on a very low monthly interest charge. The practice of piggy backing often deceives the financing services. Financing services and banks nationwide are outraged over this practice because it often means they have to produce a lower interest charge to someone that actually has bad credit.

Fair Isaac is releasing there new credit card scoring format in early September. The new format called FICO 08 will discourage piggy backers because the end effect of piggy backing will mean the main card holders credit scores will drop. The Internet websites that offer credit piggybacking will go out of business and become instinct because there will be no virtual way for the main card holder to escape without serious damage to his or her credit. The only humanely possibly way for these Internet services to allow piggy backing would be to offer credit card holders the names of recently deceased people or willing consumers who would take the chance for hundreds of dollars in payment. Piggybacking may continue past September because most banks will not update to the FICO 08 version immediately.