Let’s say they have a Capital One with 10,000 credit limit, and you are 19 years old, and you’re trying to maybe get your first car or your first apartment.
You ask Dad, you say, “Look. Can I get added as an authorized user to your Capital One card?”
Now, here’s how this works. Dad calls up Capital One and says, “I would like to add my son as an authorized user to my Capital One card,” and they say, “Sure. How do you want the card?” They’re going to mail the card to Dad.
Now, Dad has a choice whether he gives you that card that comes in the mail, or does not give you the card.
There are two ways. Dad could give you the card, which you would have access to his credit $10,000 limit or B, Dad does not give you the card and decides to say, “You know what?
We’re going to do this for credit purposes.” Now, here’s what this is about, because a lot of people ask us, “Is it even legal?
Is it even something that is still going on today?”
The short answer is yes, but we’re going to talk about the secret.
If Dad is helping you build your credit, then what’ll happen is, when he add you as an authorized user, when his card reports, which it reports once a month to the credit bureaus, the information from Dad’s 10,000 credit limit, the age of the account, and the card name will actually piggyback onto your credit.
So, here he is, he puts you on a $10,000 limit.
It’s got five years of perfect payment history. We got 60 months of all green checks. Guess what?
When Dad adds you, all that information, you just got it piggyback.
Now you’re piggybacking off all his credit, so now, when you’re looking at your credit report, you’re going to see a $10,000 Capital One with five years of perfect payment history. Merry Christmas.
This is a hundred percent legal.
Now in 2007, there was a lot of people that were doing this actually as a business, where Joe, who had good credit, was willing to add John, who didn’t have good credit, to his card.
Now, Joe didn’t want to give John his credit limit, but he said, “For a good fee, I’ll share the credit portion of it.” So John is willing to pay for it to say, “Look. If you add me as authorized user, I will pay you.” Cold, hard, cash.
John never gets to see Fred’s information, his personal information, doesn’t know anything about John.
The only thing that John gets out of it is credit purposes.
He will see John’s credit limit, he will see the card he’s being added to, he will see the history, and see the card name. That’s it.
That’s the only thing that shows up on John’s report.
Now, by that happening what happens is John instantly is piggybacking off of all that age and that credit limit from Joe.
So, what do you think happens?
John’s score instantly increases. The reason it instantly increases is that the age.
The older the card, the more John’s score will go up.
The higher the credit limit, the more score John’s goes up.
So the inside scoop is this: in 2007, this happened. There was a lot of people doing this, and then it kind of fizzled out. Kind of fizzled out in 2007.
However, today, 2019, what happened was this.
Over the last few years, it’s been more popular, where people are willing to share their credit for passive income to people that don’t have great credit who are looking to maybe get a car, a better interest rate, buy a house, get some credit cards.
Now, here’s the inside scoop.
I spoke to an attorney, and the attorney said that the actual FICO for them to change the algorithm with their system is going to way too difficult, and the attorney said that’ll probably not only be going on today but probably going on forever.
Between the credit card companies and having to change their algorithm and their complete model, which is very, very hard to do, and then FICO, who are actually doing the scoring model, for them to change it … Now, they’ve tried.
They have tried legitimately to change the algorithm to where if you are being added as an authorized user, that when it reports to your file and you’re the person who’ve received the information, and it reports as an authorized user on your file, that that would not be in consideration of the actual loan.
The problem was, it never worked. So what I’m telling is this.
It’s still working, and we run the number one tradeline company in America today, so that’s how I know it’s still working.
If you guys need help, they have brainwashed so many people in that you have to have bad credit for seven years.
You have to have levies collections on there, seven years. Bankruptcies, 10 years.
Inquiries on there, you have to keep those on for at least two years until it falls off.
Everybody in the news has been putting this out there, right, and press releases and all kinds of stuff where they’re telling you like, “You have to have bad credit.” You don’t have to have bad credit.
There is a way that you can be added as an authorized user to someone who has great credit and gets that extra boost that you may need.
Maybe it’s 20 points that you need to get a better interest rate.
Maybe it’s that 20 points to get you from your apartment to your first house.
Whatever the case is, it still is very legal, a hundred percent, and it is still going on very, very strong today.
The chances of them changing the scoring model on both FICO and all the credit card companies that allow you to add authorized users is probably not going away.
So, if you guys need help at all, reach out to us directly.
This is what we do day in, day out.
We help thousands and thousands of families with credit.
Any questions or comments, post them below and reach out to us directly.