Credit piggybacking is the process in which you can enhance or maintain your credit score by different means. This is generally done by the person who has bad credit or has poor financial health.
To boost the credit score, you can authorize another person to become your credit card user, you can sign off a guarantor who can pay off your debts, or you can open a joint account. Let’s discuss how.
- As a joint account holder: Here, two parties have one shared account. They also have full access and responsibility to that account. Both can make purchases and make repayments to enhance the credit score.
- As an authorized user: You permit another person to use your card to make a purchase. But, the repayments have to be done by you, and the credit of the authorized person is not checked.
- As a cosigner or guarantor: Here, you authorize one person to pay off your debts. This is generally done by the people who are unable to pay off their debts and don’t want to hamper their credit score.
Infographic by: moneylend.net