Low credit scores can have far-reaching effects. If you are shopping for a mortgage or other type of loan around a low credit score can lead to a higher interest rate or worse, denial. Some consumers have a loophole or found it, they think.
It’s called piggyback. As an authorized user on someone else’s credit account, the account history will then appear on your credit report. If the account you are an authorized user on has a positive credit history, you can see a boost in your credit score. If you don’t have a good credit score, adding several of these accounts can increase your score enough to get approved for a loan or a better interest rate.
Some pay a fee to “borrow” someone else’s better credit information is put on a credit report.
How To Buy Better Credit Works
You pay the company a fee of a few hundred to a few thousand dollars depending on the number of accounts you want to add. You enter your name and social security number. The company finds people with good credit accounts to add you as an authorized user to one or more of their accounts.
As soon as the credit card company has reported to the credit bureaus, you have withdrawn the accounts. The account information will be reflected in your credit score and will remain on your credit report for seven years. The positive payment history can increase other negative information about your credit report offset and your credit score.
Legal but questionable
Even if it’s right for now – it’s dishonest. If you miss someone else’s good credit rating as your own, you are a misleading creditor and lender. In essence, you are telling them that you paid your bills on time if they really didn’t. When you get approved for a loan using these methods, you have gained the false pretense of approval.
The credit point system that is in place for a reason to give creditors and lenders a system that allows them to make healthy credit decisions. While there are some exceptions, the credit scoring system is honest about whether you will pay your bills when you are.
If you get approved on time for a loan or credit card without paying spending habits, it is very likely that you will violate the standard and good credit score you end up getting paid hundreds, even thousands of dollars.
Data protection and security
You have to provide your social security number as an authorized user to be added to the other person’s account. Your social security number ends up in the hands of the person who created the accounts for him (or her). The way the process works, you don’t know who that person is or how private they will keep your personal information.
Every time you enter your social security number, there is a risk that your identity can be stolen. Don’t think that just because you already have bad credit, the extra damage can’t be done if your identity is stolen.