A tradeline is the specific line-item information about each credit account, with details about the name of lender, type of account, payment status, payment history, and other information highlighting the relationship between the lender and account holder. Credit reporting agencies use tradelines to establish FICO scores and assess credit risk.
Credit piggybacking is when a person with good credit adds another person in need of positive credit history as an authorized user to their credit card. The addition of authorized user tradelines allows the person in need of positive credit history to receive the benefits of that account holder’s good credit. This effectively happens when the bank or creditor reports to the credit reporting agencies and a copy of the tradelines is added to the authorized users credit report. A couple of examples are: when parents with good credit add children as authorized users to a credit card account in order to help them build credit, or when a person adds their spouse to boost the overall household’s credit rating.
Who can benefit the most from credit piggybacking?
- If you are just starting and have no credit
- Anyone with limited credit history
- Someone who might have gone through some tough times in the past, but hasn’t had any recent derogatory items on their credit report.
If you filed for bankruptcy or have had several delinquencies within the last two years, tradelines will not help you.
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