How Tradelines Can Help Improve Your Credit Score

There is a lot of information available on the Internet about the different ways you can improve your bad credit: pay your bills on time, only use your credit cards for emergencies, etc.

But there are other, less common and perhaps less known ways, to improve your credit score—and that’s by using seasoned tradelines.

However, unlike other strategies, such as keeping balances low, aiming to have credit lines for an extended amount of time, and challenging negative remarks on your credit report, tradelines aren’t widely known.

There are two sides of the same coin: Tradelines are any line of credit (but usually a credit card) in which an authorized user is added to an account in order to boost their score. There’s also credit repair, which is any effort to remove negative items from your credit report.

Tradelines are relatively fast and effective compared to other approaches which can be difficult and take a long time to produce results. (After all, it takes several years to build credit history.)

If you’re interested in being added as an authorized user to increase your credit score, there are two routes. Maybe you have a loved one or friend with great credit who’s willing to add you to their account. This is common for parents who want to help their grown children build or improve credit scores. There are also businesses which “sell” these services, often partnering with interested high credit score holders who are willing to take the risk of adding an unknown authorized user to their line of credit. Depending on a company or “middleman” to vet both the credit line holder and potential authorized user helps increase security and peace of mind.

Tradelines can offer nearly instant credit boosts since every credit reporting agency updates their records (and potentially your score) on a monthly basis. They’re most effective for authorized users trying to build or re-build credit. If you have a low credit score due to a lot of lines of credit or debt, adding a tradeline to your credit history might not be the best approach—particularly if that line comes with a high amount of credit.

Which Approach is Best for Me?

Credit reporting and scores can be a bit confusing, especially for those who are new to the U.S. system. You might hear contradictory statements, like you need credit (true) but not too much (also true). Ideally, you should keep your balances at zero to avoid paying interest, but you need to regularly use your cards because some of them might close automatically from lack of use. There are some people who take advantage of various credit card rewards (such as zero interest balance transfers) by opening and closing lines of credit (usually credit cards) on a regular basis. This is a perfectly legal way to “work the system” and take advantage of such rewards, but constantly opening and closing credit cards negatively impacts your score. Only you can gauge if a lower score is worth the potential rewards.

Such approaches also take a lot of time, research, planning and even negotiation. It’s perfectly acceptable to call a creditor and try to negotiate extra perks or a lower APR. However, for those looking to improve their credit score or build credit quickly, a faster and easier approach is combining tradelines with credit repair.

Think tradelines are for you? The next step is to decide whether to approach someone you know to get added to their line of credit or to go with a professional tradelines company. There are possible pros and cons to each, and keep in mind that money notoriously tangles up friendships and relationships. On the other hand, it makes sense that depending on a professional tradelines company comes at a cost. Nobody with high credit is going to sign up to allow an unknown authorized user on their account without getting something in return.

Since tradelines work by a person piggybacking off another person’s impressive credit, there’s an innate power dynamic. That’s taken out of the equation when you utilize a professional tradelines company because you’ll likely never meet the person you piggyback onto. However, if you know the person, it can cause tension and stress. Always have a written contract in place that details agreements in “what if” scenarios. This will be a given if you use a pro company, but you’ll need to draft one if you piggyback with someone you know.