If you are looking to increase your credit score, one of the tricks that you may have heard about is adding a seasoned tradeline, also called piggybacking. This involves being added to a credit card or loan that is seasoned, or older than two years old. If you are looking to increase your credit score, you may wonder if this trick really works, why it works and what financial implications there are when you are added to someone else's credit card or loan. Here is what you need to know about being added to a seasoned tradeline.
Can Being Added to a Seasoned Tradeline Increase Your Credit Score?
Being added to a seasoned tradeline can indeed increase your credit score. The amount of the increase varies based on many factors. Those who do not have older loans or credit history on their report tend to see the highest score increases by adding a seasoned tradeline.
Why Can Be Added to a Seasoned Tradeline Increase Your Credit Score?
Adding a seasoned tradeline can increase your credit score in two different ways. First, it helps to show a positive credit history, which can increase your credit score. If you do not have a positive past history or do not have your own history that dates back more than two years, you can get a substantial boost from this.
Second, adding a seasoned tradeline can improve your credit utilization. If all of your credit cards are maxed out or you have a high utilization rate, adding a new credit card to your history that is not maxed out reduces your utilization rate, which can also boost your score.
Can You Be Responsible for Debt if You Are Added to a Seasoned Tradeline?
Credit companies have caught on to piggybacking. As such, many do not report to credit reporting agencies if you are on the credit card as only an authorized user and will only report if you are an account holder. If you are on the card as an authorized user, you are not responsible for any debt incurred on the card. However, if you are added to the card as an account holder, you can be held liable for the debt if the original account holder does not pay their bill.
There are many benefits to being added to a seasoned tradeline. You can boost your credit score quickly if you are added to an older line that is in good standing and has a high limit. But you should only do this with someone you trust. You can be held financially liable if the credit card or loan is not paid, which can end up hurting your credit score.