A trade line is a record of activity for any type of credit extended to a borrower and reported to a credit reporting agency. For example, a mortgage loan is a tradeline, a credit card is a tradeline and trade lines are used by credit reporting agencies to calculate a borrower’s credit score.
Most creditors look at tradelines to determine if you are creditworthy, therefore, adding positive tradelines to your credit report come in handy to improve your credit score. Some people are even buying authorized user tradelines to get their credit score back up, however, it is not the only way.
| Pro-Tip: You can also add an authorized user tradeline on a primary tradeline. If you have a primary credit card, you can get someone authorized to post a tradeline on your credit report or vice versa — someone can put you on as an authorized user if you have a good credit score. |
Creating a New Credit Account
Opening a new credit account automatically creates a new tradeline which allows you to have a positive record on your credit report. Also, increasing the number of total available credit lines can boost your credit score only if you are responsible for the payments.
Factors that determine your credit score include the type of credit you have in your account like mortgages, credit cards, etc. and the difference of how much money you had in that account and how much money you used. Where creating a new credit account can help you gain positive credit score, it can quickly destroy it too if you are not careful with the usage.
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I always advise people not to go for this option if they already have good credit from different sources. Your focus should be to go for quality rather than quantity. If you stay below the limits of your existing credits cards, the chances are that you won’t need to open new credit accounts.
Adding an Authorized User Tradeline
By far, the most efficient method of boosting your credit score is by adding authorized user tradelines to your credit report. The difference between a primary tradeline and authorized user tradelines is that primary tradeline is handled personally by you and an authorized user tradeline is an account opened and managed by someone else.
This process is called piggybacking, which involves adding someone with good credit history on your account, and in turn, it gives a positive influx of credit and payment history. If you rent authorized user tradelines from trusted vendors like Personal Trade Lines, it will help you boost your credit score in no time.
Add a Pre Existing Account to Your Credit Report
This is one of the handiest and least risky ways to add tradelines to your account. Quite simply, you can ask a parent, a relative, or a close friend to add you to their account. This will allow you to benefit from the other person’s positive payment history. However, you can do damage to their credit history if you are not careful and they can in-turn damage yours too.
You can also confirm that all your current and existing accounts are listed on your credit report so that whenever you successfully pay off a loan, creditors know about it. All your previous loans, mortgages and credit cards need to be listed on your credit report to avail the benefits of a positive score.
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