Credit Piggybacking

gazoakley

I saw this recently on the Consumerist:

http://consumerist.com/5393595/how-to-cash-in-on-your-good-credit

"Someone with a good credit score, our credit score seller, would add someone with a bad credit score, our credit score buyer, as an authorized user on their credit card. The buyer wouldn't get the card or get access to the line of credit, they benefited by having that account appear on their report."

The idea being you can add someone as an authorised user on your credit card without giving them an actual card themselves. They'd benefit from your credit score.

One of my friends who moved over from the US recently whilst having a good job continues to find it difficult to get credit. The trick described is supposed to work over there, but would it work in the UK? I don't know if I gave him authorised user status if it would appear on his credit record.

Any ideas?

Moggles_2

The short answer is no, this doesn't work here in the UK.

The fact that somebody has an additional card on a friend's account is of no help in building a credit history, as the principle card holder remains solely responsible for managing the account.

izools

It doesn't work like this.

A second cardholder on a credit card account does not generate a financial link between both people.

If you did create a link, by opening a joint account like a bank account in joint names, you would then be treated as financially linked, however:

1. If the person with limited credit history were to apply for credit the creditor would still consider their lack of credit history a risk
2. This works both ways, in so much as either person having negative information would adversely affect the other until a "Notice of Dissasociation" is actioned with all three credit reference agencies - and this is a lengthy process

Best bet is the person should get a basic account like a Barclays Cash Card account or Co-Operative Cash Minder. Neither of these accounts are credit scored, but both appear on the credit report as a full bank account and both come with a full VISA debit card.

Then the person with no previous history can build enough so that a creditor can atleast "Trace" their existence, and can get a Vanquis / Capital One / Aqua / Barclaycard Initial credit card, and build their history from there.

There isn't any quick workaround, I'm afraid

Edit: Moggles beat me to it, ish!