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WHAT IS A PRIMARY TRADELINE?
A primary tradeline is an account on a credit report that is designated only for the primary account holder. This includes all their lines of credit such as mortgages, credit cards, car loans, or anything else that is being borrowed under the primary account holder. They will be responsible for paying the balance on their accounts and it would be reflected on their credit score depending on how well they can manage their debt. These are used when users want to first establish a credit score and begin to build a payment history. Most of these primary tradeline are easy to open such as credit cards through banks.
WHAT ARE AUTHORIZED USER TRADELINES?
Authorized User (AU) Tradelines also referred to as Piggybacking are revolving accounts which are added to primary tradelines. The purpose of this usually involves a user in need of a credit score boost to gain a loan that they didn’t qualify before such as a car loan or a mortgage. By getting added to a primary tradeline as an authorized user, their payment history is transferred over to you, resulting in an increase of credit score. The term “seasoned” or “aged” refers to the fact that the tradeline that these users are piggybacking on must have a past payment history that goes back to a minimum of two years. The higher the history or age of the tradeline, the more beneficial the tradeline can be to your credit file in means of credit score boost. The users that will become authorized users of the primary tradelines will not be responsible for any charges or balances on these credit lines. Users will also not have any access to utilizing the primary tradeline, the only benefit that would come from being an authorized user would be that they would be associated with the credit history of the primary user. With these new financial services, you will be able to get several years’ worth of good payment history in a matter of weeks, condensing the time and making it more efficient for clients who need good credit scores.
WHAT’S THE DIFFERENCE BETWEEN A PRIMARY & AUTHORIZED USER TRADELINE?
The main difference between Primary and Authorized User Tradelines would be who is responsible for paying the balance on the accounts they are assigned to. If you have a Primary Tradeline on your credit report, whether it be a car loan or mortgage, you are responsible for paying the balance. On the other hand, if you have an Authorized User Tradeline, as a user, the only thing you will inherit from that credit line would be the payment history, besides that you are not responsible for any payments. Another difference would be the purpose of each of the tradeline and how they affect someone’s credit score. If a user has no history of payments in their current credit report, it would be more beneficial to have a primary tradeline, this way the user can establish a history and continue to benefit as the user utilizes the tradelines and makes on-time payments. If the user has already established a payment history but needs a boost, instead of opening more primary tradelines which can negatively affect their score, it is recommended to purchase Authorized User Tradelines. This way the user will be able to inherit the credit score and boost their overall score.
HOW MUCH BETTER CAN A CREDIT SCORE GET FROM THESE TRADELINES?
It depends on the items of your credit report and the tradelines being chosen. Doesn’t matter what situation, the credit score will never go down after purchasing an authorized user tradeline. On the other hand, clients’ credit scores may change little or not at all; each client is unique, and the financial services firm must be able to formulate a plan that will best benefit your score. One definite scenario would be that if you have no previous credit score and decide to purchase an authorized user tradeline, your credit score will most likely be in the positive score zone.
WHAT DETERMINES THE PRICING OF AUTHORIZED USER TRADELINES?
Age, Limit and Balance. When searching for authorized user tradelines that will help boost your credit score you should be looking for a tradeline with a significant limit, a year’s worth of payment history, and a low balance.
WHICH IS BETTER – PRIMARY OR AUTHORIZED USER TRADELINES?
It depends on what you need at the current moment. There are two scenarios you can find yourself in, either you have no existing payment history and no credit score, or you have several credit card accounts, but need a boost. If you have no previous credit score then it is preferred to get a primary tradeline, this way you can get an established score to work off. You can get these by opening credit cards at banks and just getting any credit card with your name on it. On the other hand, if you already have a history and would need a boost, it is better to get an authorized user tradeline to gain years of the payment history added to your report and help boost the score. This is usually better when you have already gained some primary tradelines such as young credit cards with low limits.
SHOULD YOU BUY A PRIMARY VS. AN AUTHORIZED USER TRADELINE?
You cannot buy a Primary Tradeline, the only type of tradeline that is available for purchase would be Authorized User Tradelines. Although it is possible to transfer over a Primary Tradeline, it requires legal matter and is often much more expensive and, in some cases, illegal.
WHY SHOULD YOU BUY AUTHORIZED USER TRADELINES?
The only reason you should buy an authorized user tradeline is if you need it. Therefore, assessing your situation is important to see if you need a credit boost or not. For clients who have no trouble paying their bills and debts on time, then most likely there will be no benefit to buy a tradeline because it would not boost your credit score. Buying an authorized user tradeline would be for someone who has low credit score and needs a boost. Having a low credit score can result from having too many primary tradelines or having trouble paying on time. It is important to see if you would benefit from buying an authorized user tradeline as it isn’t always beneficial.