What Are Credit Tradelines? My Thoughts About Them


Tradelines can be a great way to leverage other peoples good credit to build your own credit.  Below we’ll discuss the details of how this works and why for some it’s one of the best ways to build credit fast.

But, for many, you might find yourself involved in a legal mess or worse, a credit building scam!

Before proceeding, read my disclaimer below.

Disclaimer: You should do lots of research and be cautious with the practice of using tradelines. The banks and credit card companies actually allow the practice, so it’s not an illegal process or anything, but it could raise some ethics and red flags if you work with a company who is dishonest. I ultimately leave the decision of whether or not it’s an ethical practice on to you. Also, I’m not a lawyer or offering any legal advice here. Thanks!

How Tradelines Work (piggybacking on someone else’s credit account)

If you have a low credit score, you can build it up fast by piggybacking on someone else’s credit card account as an authorized user. But, for it to be worth the effort, the credit account must belong to someone with an excellent credit score and profile.

Adding someone to a credit account is a huge responsibility and requires a lot of trust between all the parties involved. Unless it’s a close family member or spouse, it’s going to be hard to agree to any kind of terms without some legal help.

Here’s how it works, let’s use the following example:

Paul needs to establish some new credit so he can get his low score of 600 up to a higher credit score of 700. Julie who already has excellent credit and an open credit card account (with a 10k limit) wants to help Paul out.

Julie can call up her credit card company and request to add Paul as an authorized user.

Julies credit card account will eventually show up on Paul’s credit report, normally after 30 days. This new account will help Paul’s credit score go up a lot higher in a short amount of time.

Tradeline Legal Risks & Protections

In the above scenario, the risk to Julie is that Paul has access to the credit account and can make purchases. With the proper legal agreement, Julie can be protected. In the agreement it can state that Paul will never have physical access to the actual card for the account, thus preventing any purchases from being made. Julie will physically hold the card instead.

The last risk to consider would be for Paul’s credit score to go down. In the legal agreement, Julie would agree to make all payments on time and keep the balance on the credit card account low. If this account starts having late payments and a high credit utilization (more than 30%) it could actually make Paul’s credit look bad.

There are many more risks for either party. It’s highly advised to find a lawyer or get professional help to get a tradeline agreement set up correctly, even if you decide to do this with a close friend or family member.

One Last Thing About Tradelines

To get some advanced information and help for setting up a tradeline, I recommend doing some research on Google. In your search results, you’ll notice links to forum posts, blog articles, and many tradeline service companies.

You really have to do your research before doing business with any of these companies!

Everyone will have a different experience, and there are NO Guarantees with tradelines or any type of credit repair strategy for that matter.

If at any point you’re not confident in the process of setting up a tradeline, it may not be worth it as an option for building up your credit score.

Final Thoughts

I’ve spoken to many people over the years about how they used tradelines and how it benefited them. With careful considerations, tradelines can be very powerful for building up your credit score.

Just be smart about it and don’t get caught up in a scheme!

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