piggybacking credit
Boosting a credit score by being added as an authorized user on a well-managed account.
Example
“Being added as an authorized user on her father's oldest card added 15 years to her average credit age.”
Memory Tip
PIGGYBACK — borrow someone else's good history. Instant credit age boost.
Why It Matters
Piggybacking credit can be a quick way to improve your credit score without having to build credit history from scratch. This matters because a higher credit score can help you qualify for better interest rates on loans, credit cards, and mortgages, potentially saving you thousands of dollars over time.
Common Misconception
Many people assume that being added as an authorized user means you are responsible for paying the account balance. In reality, the primary account holder remains responsible for all payments, and you benefit from their good payment history without taking on any financial obligation.
In Practice
Suppose you have a credit score of 580 and your parent with an excellent credit score of 750 adds you as an authorized user on their credit card account that has a long perfect payment history and low balance. Within a few months, your score could improve to 650 or higher simply because the positive account history now appears on your credit report, even though you never made a single payment on that account.
Etymology
Modern credit building strategy — inheriting positive credit history from another account.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
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