Piggybacking on other’s credit record - what is it?
Hi,
Here’s some thing interesting to share with you all. Piggybacking on someone else’s credit records is becoming quite common these days. The primary reason behind this is getting qualified for a mortgage by putting up someone else’s credit records. While it hasn’t been declared a crime yet, it is not something pleasant and ethical.
What usually happens is, borrowers who are less creditworthy but yet wish to have a home of their own, approach companies which offer the so-called credit repair services. These companies attach the authorized credit card accounts of consumers having good credit with those having bad credit. That is, the companies pay people with good credit card payment history so that they’ll allow low credit mortgage applicants to be listed on their used accounts. And, once added, the poor credit borrower shares the same credit record with the good credit consumer.
Now, when a person’s credit is attached to someone else’s credit history, it misrepresents the latter’s creditworthiness thereby making it look much better than it actually is. And, due to such a thing happening, a borrower’s credit score may increase to any higher value. In order to stop this unethical practice, the fair Isaac Corporation has decided to remove the authorized-user accounts from being considered when it will come up with it’s new version of the FICO Score. One more credit score..I guess will borrowers get confused at that..so many scores..will lenders use this new version of the FICO – time will say it all.