Time to get off your parents back- Consumer Credit Loop Hole comes to an end…

The practice of Credit Piggybacking, a commonly used credit-bolstering trick, will be taken away from lenders and borrowers in the weeks and months to come.

An article in last week’s Tri-Valley Herald explained that the practice of adding a family member to an existing line of credit in order to bolster their credit rating will be eliminated by Fair Isaac Corp this month, and by the two other major credit bureaus next year.

The trick is normally used to help a young borrower establish credit by adding them to a parent’s long-standing account. It creates the illusion, to the computer that’s calculating the kid’s credit score, that they have maintained the account when in fact they have never been responsible for it.

The recent shake-up in the residential mortgage markets has caused lenders to look at recent practices more closely, and to eliminate loopholes like this one that would cause them to lend to a less-than credit worth borrower.

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