If you are new to the world of credit, and find the concepts of credit tradelines, and secure cards mind-melting, you are at the right place. In this brief guide, we will cover a few basics you need to know about tradelines in understandable terms. So, stick with us till the end.
Tradeline Definition
Tradeline is nothing more or nothing less than a strategy that you can use to get approved for your own lines or credit, or you can get your own secure credit card.
In simple terms, tradelines offer you a safe way to have your credit card with positive credit points. It will enable you to be more free financially without affecting your credit profile.
Who Needs the Tradelines?
If you are someone with zero credit score and don’t have any idea where to start then tradeline could be your way to start. Now, it is not necessary that you must be a novice in the credit world to buy tradelines. It’s just purchased more by people who are starting in the credit world.
How You Can Start?
One way to start your tradeline is piggybacking someone who already owns a credit card or has a credit account. You ask that person to make you an authorized user of their credit card. They can do this by calling the creditor and by giving them your basic information. This way you become the active user on that person’s credit card.
Simply put;
Someone who is a credit card holder (A) and you (B) both can share the same credit card. This way person A’s credit history and credit points become your credit history and credit points.
The catch in this process is that you won’t get to use person A’s credit card. It’s like you are just using his/her credit profile for building your own credit profile, without actually using the money.
Things to Consider Before Choosing Someone as Your Piggyback
It is not like you can ask just anyone to let you become their credit card active user. Because their credit history and credit points become your history after becoming an active user. It can positively and negatively affect your credit profile.
So, you have to choose someone who is
- Never late with his/her payments
- Have at least 3-4 years old credit account with a strong credit history
- Have a high-limit credit card
In case the person you are using as your piggyback has any late or due payments, it can affect your credit profile. Moreover, this is extremely important because it will show up on your profile even after you close your tradeline. So, the impact of your sponsor credit history will be there even after you are not an active user.
Why Fuss About Tradeline?
After reading all this, you may be wondering, when this is all about opening a credit account, then why can’t we get a secure credit card in a straight way?
Well, it’s because for 2 reasons;
- With Tradeline, you can have your credit profile ready with the OPM (other people’s money) strategy.
- Secondly, you need to invest your own money to get a secure credit card, which is against the purpose of credit.
So, these were the few basics, hope you have a better understanding of tradelines after reading this article.