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Mustang Advisors Debt Consolidation Launches Credit Card Piggybacking Review

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With this simple arrangement, one party tries to benefit from the good credit rating of someone else by adding them to their account.”
— Ari Mustang Advisors
VIRGINIA BEACH, VA, USA, August 24, 2021 /EINPresswire.com/ -- Do you know why they are called Mustang Advisors? In 1971, the United States Congress recognized that mustangs are living symbols of the historic and pioneer spirit of America, which continue to contribute to the diversity within the Nation and enrich the lives of the American people. The same can be said for Mustang Advisors Review of Credit Card Piggybacking.

Mustang Advisors Debt Consolidation team looks for debt consolidation scams, but while credit card piggybacking might sound illegal, it’s not. With this simple arrangement, one party tries to benefit from the good credit rating of someone else by adding them to their account. This can happen with multiple accounts and it’s a surprisingly common arrangement. What is Credit Card Piggybacking? Piggybacking credit cards is when someone allows you to become an authorized user of their credit card. You can use a credit card to make purchases, but you won’t be responsible for making monthly payments. In this sense, piggybacking won’t measure your own payment history, but instead will focus on the primary cardholder. Nevertheless, your authorized user status is still considered by credit bureaus, providing the credit card issuer reports to the agencies. While you won’t get the same benefits as holding credit cards in your own name, you will notice some results.

Person-to-Person Piggybacking is the standard form of piggybacking. u become an authorized user on credit cards held by a family member or relative. One of the major initial hurdles when you’re first building a credit score is insufficient credit history. By becoming an authorized user, you’ll benefit from how long the card has been open. You should be aware that unless the primary cardholder has good or excellent credit, this will impact your credit report, especially if the delinquency is on the credit card you’re piggybacking.

Does Piggybacking Work?
Piggybacking can be effective, but only if the credit card issuer reports authorized user status to Experian, Equifax, and TransUnion.

Even if the card issuer does report this status, credit bureaus don’t view this in the same way as if you were the primary cardholder. Expect a small bump in your credit score, but nothing dramatic.

There is no shortcut to building credit in your own name by making payments on time and managing your financial accounts satisfactorily. Doing this will also teach you about credit management in a way being an authorized user can’t.

Risks
If the primary cardholder engages in shady practices with their credit card, this will impact your credit score. Late payments will affect your score as well as theirs. A series of late payments or a default would bring about repercussions for your credit score, too.

Even if you feel the person has great credit when you consider piggybacking, unexpected job loss or emergencies can lead to unexpected financial difficulties.

Beyond the risk of bad credit, you should also think about the credit utilization ratio on the card. If this goes up too much, it will impact your credit score and theirs. A ratio of more than 80% is typically predictive of default.

Conclusion
If you have a bad credit history or no credit history at all, piggybacking could be a strategy worth considering, certainly on a person-to-person basis.

If, however, you’re tempted by the for-profit version, you’ll likely only get temporary respite, and it will be costly to achieve.

For someone primarily using piggybacking to improve credit, it’s essential to establish that the card issuer in question reports you authorize user status to the bureaus. If it doesn’t, you’ll achieve no benefit beyond being able to use the card for spending.

Even if you press ahead with this arrangement, you should think of it as nothing more than a foundational strategy. Authorized user status will help to build credit, but a longer-term solution is to obtain credit under your own name and to start building it slowly but surely over time.

Secured credit cards or credit-builder loans allow you to do this the easy way.

Whichever route you take, you’ll put up your own funds as security for the loan or credit line. This can be anywhere from $200 to $1,000. As you make monthly payments and they are reported to credit bureaus, your credit score will start improving. Ultimately, the lender will release your security deposit and you’ll be eligible to apply for credit from other sources.

Ari
Mustang Advisors
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