What Is a Tradeline?
Well, tradelines (in the broadest sense) are what make up the majority of a person’s credit report. It does not need to be said why someone’s credit report is important. We all know how important a credit report is. Essentially, everyone wants to have the best credit report possible.
To this end, it is wise to study how to build good credit. The basic answer is to open credit accounts of various types and make all your payments on time consistently. If you do this, over time, you should have good credit.
By optimizing the factors that go into a credit score, you could eventually even get a perfect 850 credit score.
If you currently have bad credit, turning that around and building good credit is the exact same process. Open new credit accounts of various types and make all your payments on time. It may take longer to rebuild your credit than it originally took to build your credit because those negative marks will remain as part of your credit report for quite some time.
If you have errors on your credit report, you may also want to consider beginning the process of credit repair, whether through DIY credit repair techniques or with the help of qualified credit repair professionals. [Disclosure: This article contains affiliate links.]
When purchasing authorized user tradelines, when you get added to the credit card as an authorized user, it does not show on your credit report when you were added. Rather, the entire history of the account is reflected in your credit report, with some exceptions depending on the bank.
For example, if an authorized user is added to a credit card that is 20 years old, it will simply appear as a 20-year-old credit card that this person has on their credit report with an authorized user status. Therefore, the credit scoring algorithms often just assume this person has been on this card for 20 years. If the tradeline has a perfect payment history, that is a nice thing to have in your credit report.
Also, while there may be several different utilization ratios at play in the secret credit score algorithm, an authorized user tradeline can play a factor in the overall utilization ratio.
The truth is that since the credit scoring algorithms are secrets, no one knows exactly how it works. There are a lot of inferences, correlations, and speculation that has taken place to try to understand the way credit scores work.
In short, you only want to add tradelines that are superior in age and credit limit to what you currently have in your credit report.
If you currently have high utilization, higher-limit tradelines may help with your overall utilization ratios.
You should also know what your average age of accounts currently is. You only want to add tradelines that can increase your average age of accounts in a meaningful way. We have a Tradeline Calculator to help you calculate these ratios quickly and easily.
While we do not offer any guarantees on specific results, we do guarantee that your tradelines will report on your credit report. Since everyone’s credit report is so unique, it is up to you to use the knowledge and tools we provide so that you can determine which tradelines would be best for you.
For more information on how to choose the best tradelines for your credit file, see our Tradeline Buyer’s Guide.
In an authorized user position, the account will appear on someone’s credit report, but the authorized users do not have any financial responsibility for that account. Therefore, many people think that primary accounts are better than authorized user tradelines.
A primary tradeline is an account that an individual has in their name where the creditor has extended some form of credit to that person specifically. They are financially responsible for that account and this is reflected on that person’s credit report.
The overarching goal of someone trying to build their credit should be to open their own primary accounts and keep those accounts in good standing forever. In this way, primary accounts are the best.
However, in the industry of buying and selling tradelines, trying to purchase a primary tradeline may be full of pitfalls, scams, and other schemes that are very illegitimate and we recommend staying away from this idea in general.
For one, you have to ask yourself if it passes the common sense test. How can you buy an account that is supposed to, by definition, belong to you as the primary account holder who is financially responsible for that account? Do you want to buy someone else’s debt?
If you actually get credit extended to you, in your name, then that really is a primary account. This can be a good thing, but often they will be relatively low limits and of course this new account will have no age. So is a primary account with a small limit and no age better than an authorized user tradeline with a high limit and lots of age?
From what we have seen, if we had to choose between these two scenarios above, we believe the authorized user tradeline with age and a higher limit would be the more powerful choice.
For more information on primary tradelines, see “Buying Primary Tradelines: Fact, Fiction, or Fraud?”
The word “seasoned” refers to time. A seasoned tradeline has been open for a certain period of time. Each financial institution that extends credit will define how much seasoning they are looking for but, in general, any account under two years would not be considered seasoned.
In other words, two years is the minimum amount of time that would possibly qualify a tradeline to be considered seasoned.
In short, when it comes to your credit, the more seasoned the better.