Saturday, December 16, 2006


This method of repairing credit ratings really seems to be very interesting. As far as I understand it it works like this.

So, someone has a bad credit rating. They want to improve it and the way to do that is to borrow money and then repay it. That's simply how the whole credit rating system works, by keeping track of who borrows money and who repays it. Those who do repay on time are obviously considered to be a better credit risk than those who don't when it comes to making a decision about lending them more money.

OK, but what if your credit is so bad that you can't actually borrow any money which you then pay back?

This is where piggybacking comes in. Someone who does have good credit gets a new credit card (on their own account) in your name. It goes to them of course, not to you. They then use it to buy something they would buy anyway and pay their total bill in the normal manner.

Because they have then borrowed money and repaid it, but in your name, that borrowing and payoff then appears in your credit file, boosting your rating.

Now, why would people do that? Because you pay them to do so.

Seems simple enough really, doesn't it?


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