Back to 2009, the U.S congress passed and president Obama signed into law: The credit card accountability responsibility and disclosure act of 2009. Which is more commonly referred to by its acronym the card act . The card act among a variety of other things, restricted credit card issuers from opening credit cards for consumers who are under the age of 21, unless they are able to display that they had an income or the capacity to pay a credit card bill or they had a cosigner.
This is just one example of the various difficulties that certain segments of our populations face, when they’re trying to either build or rebuild their credit reports and credit scores. Certainly people who are over 21 have experienced their own difficulties either trying to build credit from scratch or if they’re new to the country and have never had any sort of credit in the U.S system, or they’ve had to deal with rebuilding credit reports or credit scores because of some sort of economic or personal financial disaster that they’ve had to deal with.
It is not uncommon, for certain financial experts to advise consumers to try to find co-signers open secure credit cards ,or take out credit builder loans as the variety of strategies that they can employ to either build ,or rebuild their credit reports and credit scores. All those strategies have their own respective pros and cons some work better than others, some work faster than others and some are just flat out bad ideas or otherwise don’t work. But in this article, i’m going to show to you a little bit about strategy of Tradeline Supply Company, in order to help increase your credit score.
What is Tradeline Supply ?
When you buy or rent a Tradelines, you pay money for a stranger to add you onto a credit card as an authorized user (AU). It’s a strategy that Tradeline Supply Company are using to raise your credit score, and whether it can be used to build credit reports and credit scores.
Authorized User Credit Strategy (AUCS)
An AUCS is is a common method for building credit reports and credit scores. It’s actually fairly simple: a primary card holder, meaning that the person who actually opened a credit card would add a consumer onto their existing credit card account as an AU. That it essentially authorizes that consumer to use the credit line, and they have full charging capabilities on the card as the primary card holder.
The difference between the primary card holder and the AU is that the AU does not have any liability for the debt, all the debt that is incurred on the card is the responsibility of the primary card holder not the authorized user. Kind of think of it for the AU from their perspective as a credit card but with training wheels.
The Pros (or the credit building quality of an authorized user card)
Most credit card issuers will add the history of the credit card account to the AU’s credit reports, which will showing at Equifax, Experian and Transunion, and the addition of the card can help the authorized user to build or rebuild their credit reports and credit scores.
So much has been made and written about the impact of authorized user accounts on consumer credit scores, but there are some self-proclaimed financial gurus, who suggest that authorized user accounts have absolutely no impact on credit scores, and that’s incorrect.
Does Buying Tradelines Help Credit Scores?
We do know that under most of the credit scoring models that are still commercially available that are built by both FICO and Vantage score solutions, which incidentally makes up about 100% of the credit score market in the United States. Their credit scores will still consider a newly added authorized user account, the next time that the consumer’s credit score is calculated and of course if the credit card account has been managed properly, it can certainly help to improve the consumer’s credit scores, almost immediately.
To the extent that you are contemplating or considering becoming an authorized user on the credit card of another person, like a loved one or a spouse or a parent, you should probably learn a little bit more about how the card is being managed, and some of the other scoreable attributes of the card before you have your name added to it, before you allow your name to be added to it. So you want to find out what the average monthly balance of that card.
The reason that’s important is because credit scoring systems will penalize you, if the balance of that card represents too much of the credit limit, that’s formally referred to as that credit card’s revolving utilization ratio. You can calculate that by dividing the balance of the card by the limit of the card as it appears on your credit reports, the lower that ratio the better it’s going to be for your scores. If you have your name added as an authorized user to a credit card that’s got a very high balance relative to the limit, then that ratio is going to be very high, and that credit card could actually be more harmful than it would be helpful.
Of course, it should go without saying that you’re going to want to ensure the card has does not have any history of late payments, no record of default. Because adding your name to a card like that is actually more counterproductive than it would be productive.
The Best Card to Start when Buying Tradelines
In the perfect scenario, if you could pick the perfect credit card to have your name added to as an authorized user you would choose one that is:
- Old (perhaps even decades old)
- Very low balance relative to the limit
- Always been paid on time
These are the attributes that credit scoring systems look for, when they’re considering that credit card account as part of the calculation of your score and if you’ve got a very old card that’s always been paid on time and it has a very low balance relative to the limit then that’s going to be very optimal for your credit scores.
Keep those things in mind before you contemplate having yourself added as an authorized user on any credit card account, and you should be just fine.
If you really want to step up your game, check out the new eBook I wrote for you, the Credit Repair 101. Simple instructions, and illustration will help you learn how to boost your Credit Score, and other amazing credit tips & tricks. Check out the samples on the product page.
Thanks for reading and Good luck with your credit journey.