Piggyback can lift your credit score |
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However, the FTC has made no ruling on companies that offer piggybacking and the services are relatively new to the marketplace, Dorman says.
Some of the Internet companies make the everybody-does-it
argument. "The U.S. government allows countries to piggyback,"
says Johnson. "We make loans to people. Corporations are able to do it by
allowing other companies to piggyback on their credit profile. The banking system
itself is a system where you're leveraging other people's resources and efforts.
"So if an individual who is a supplier has a good
credit history, why can they not leverage their own credit history?" Johnson
asks. "So I guess my question is why should the rules be different for the
American citizen if the rules apply to organizations and corporations and government?"
Arnold of Cardratings.com agrees that piggybacking is legal,
but he doesn't like it much. "They do allow it,"
he says. "It's a legal process. It is permitted. With a company like this
you can admire their entrepreneurship, but they're using a loophole in the system." Arnold
says he doesn't like what he sees, and suggests consumers should avoid any type
of credit repair service in general. Piggyback firms also say
that top mortgage brokers have used the technique for years. Real
estate and mortgage fraud expert Ralph Roberts acknowledges that real estate and
mortgage brokers have been telling clients with poor credit scores to piggyback
their credit. But, he calls the "artificial inflation" of credit scores
an invisible enemy. "You can't see what has happened
until the home is foreclosed. There's no tool to detect the scheme," says
Roberts. Roberts says piggybacking is fraud and the companies
that offer it are breaking the law. "Current U.S. Code
on bank fraud says whoever knowingly executes, or attempts to execute, a scheme
to defraud a financial institution by means of false or fraudulent pretenses can
be fined up to $1 million or imprisoned up to 30 years, or both," says Roberts
in a statement. Opponents of piggybacking are concerned
about cardholders surrendering credit histories to Internet companies and say
that encouraging additional users on the credit lines would promote identity theft.
The critics warn that these cardholders are giving firms access to their credit
information. Arnold warns, "If you take the companies
at blind faith then you are really putting yourself out there to be taken advantage
of." | 
