The Ultimate Guide to Tradeline for Beginners & Pros

You’ll get the most out of this tradeline guide if you desire to learn everything tradeline, and you plan to put in the work to learn the concepts that will enhance your credit health.

We designed this guide to describe all major aspects of credit, from understanding the terms and words on your report to the credit factors that make up your score, the weight of each credit factor, and how tradelines can help improve those factors that could lead to a higher score.

The credit and trade line world is ever-changing and complex. 

However, you can easily understand the basics, and even a tiny amount of credit knowledge can make a big difference.

There is a ton of free credit education available on the web, but most of them have misinformation or are so complicated that most people give up.

That’s why we created this guide!

If you combine the knowledge you’ll gain from this content with some actionable steps; you’ll be on your way to becoming a savvy credit consumer.

How Much of this Guide on Tradeline Do I Need to Read?

A credit score showing tradeline progress

If you’re serious about raising your score and are unfamiliar with tradelines, we recommend reading this guide from top-to-bottom. 

We’ve tried to make this guide simple to understand and as concise as possible, so learning the basics of credit and tradelines is easy. Learning how credit works is a vital first step in achieving your goals. 

You’ll want to go through the guide at the pace that suits you best. Be sure to take action — you’ll get the best results, and you’ll be glad you did!

If you fully understand how it works because you’re a pro, check out the following steps section of this post for more details.

Are you excited to learn how to increase our score? Let’s get started!

The Basics of Primary Tradelines

A tradeline is simply an account on your credit report. Most tradelines are credit accounts like credit cards, auto loans, student loans, personal loans, mortgages, or lines of credit.

So primary tradelines are credit accounts that you are the main account holder.

With the recent industry shift to add self-reported accounts such as rental history, Buy Now Pay Later (BNPL), and utilities, tradelines now have a broader meaning.

In a nutshell,

Tradeline = Account on your credit report

Maslow’s Hierarchy of Credit Tradelines

Have you ever heard of Maslow’s hierarchy of needs? It’s a motivational theory in psychology that prioritizes the most fundamental human needs like food, safety, and belonging. 

The idea is that you can’t achieve the higher needs at the top if you haven’t met your basic needs first. For example, most people in survival mode would need to worry about food and shelter first before seeking to be loved. 

We made a similar pyramid to explain the way everyone should think about their credit, and we’ve “shamelessly” called it “Mozlow’s hierarchy of Tradeline needs.”

Here’s what it looks like:

As you can see, the foundation of a good score begins with paying your debt on time and moves up from there.

Using this tradeline beginner’s guide, we can follow these seven steps to improve your chances of a higher credit score in 45 days:

  1. Pay past due accounts
  2. Pay collection accounts in exchange for deleting them
  3. Limit credit applications
  4. Add credit history and available credit with a tradeline 
  5. Pay down your credit cards
  6. Request for a credit limit increase
  7. Apply for your target credit account

We’ll dive deep into each of these areas throughout this guide on tradeline. However, we want to give a quick intro here because it offers a look at how we structured the guide as a whole.

How Credit Works in a Nutshell

Image of a credit report listing all accounts including authorized users tradelines

To explain how tradeline works, let’s first explain how the credit scoring algorithm works to determine your score.

Although the FICO algorithm uses over 50 data to calculate your score, the six most important ones are listed below. They’re also known as credit factors.

  • Payment history [include an image of an 800 score]
  • Credit card usage
  • Derogatory marks
  • Credit age
  • Total accounts
  • Hard inquiries

These credit factors have weights and grades assigned to them, similar to our school grades.

An easy way to think of your credit is that the higher your grade in each area, the higher your score. Similarly, the lower your grade, the lower your score.

The goal is to increase your grade in multiple areas to improve your chances of a higher score.

How Tradelines Work [Authorized Users Credit]

Now that you understand how the FICO algorithm calculates your score, explaining how tradelines work will make more sense. If you skipped ahead to this section, please read the previous section first.

Here’s the secret …

You may have heard the term authorized user tradeline. An authorized user trade line is like any other account that reports on your credit, but someone else owns it.

A tradeline is a credit account on your report, whether you’re the owner or authorized user. It’s that simple!

When most people search for tradelines, they’re looking for authorized users tradelines on a credit card. So how do they work?

The basic concept is straightforward.

Just like in school, a higher grade means a higher score. Credit is no different!

Remember the credit factors we talked about in the previous chapter? That’s how authorized user tradelines and credit are connected.

The goal of the tradeline is to increase the grade of your credit factors, primarily your credit age and credit card usage.

LegendABCDF
MeaningA gradeB gradeC gradeD gradeF grade

Raise Credit Age

So if you’re trying to increase your credit age, then a seasoned tradeline is what you need. Seasoned tradelines are usually considered any account that’s at least 10 years old. I can even be a 20-year-old credit card. For example, if Jada’s credit age is an F grade, her goal is to improve her score to the next tier, a D grade or better.

Credit age [average]
grade (1 Yr 3 Mos) ⮕ grade (2 Yrs 5 Mos)

Tip: most people think that their credit age is the age of their oldest Account. It’s not! Credit age is the average age for all your open accounts.

Lower Credit Card Usage

If you need to lower your credit usage, then a high limit tradeline is what you need. Here’s another example, Sebastian’s credit card use is a C grade. His credit goal will be to get it to a B grade or better.

Credit card usage
C grade (41%) ⮕ B grade (25%)

Improve Credit Age and Credit Card Usage

However, some people need a credit tradeline that is both an aged tradeline and a high-limit tradeline. Let’s say Lindsay has an F grade on credit age and a C grade on credit card use. Then her goal is to get a better rating on both of the credit factors.

Credit age
grade (1 Yr 3 Mos) ⮕ grade (2 Yrs 5 Mos)

&

Credit card usage
C grade (41%) ⮕ B grade (25%)

Do Tradelines Still Work?

The answer is it depends on your credit file. There are three types of credit profiles:

  • Tradeline profile
  • Credit repair profile
  • Combination profile

Tradeline Profile

A tradeline profile is someone without established credit history and less than two negative items on your report. These profiles have the most credit score impact and benefit from adding a tradeline than any other profile.

Tip: figuring out the right tradeline is vital. See our next step section below to get started.

Credit Repair Profile

Credit repair profiles have several negative and positive items on their report. 

Tip: if you fall in this category, first complete credit repair by removing the negative items from the report so you can get to the tradeline profile.

Combination Profile

A Combination profile needs both credit repair and tradeline. These profiles typically have significant bad credit with few positive accounts on their credit report.

They may well need to get help from a credit repair company or apply credit repair techniques by themself to improve their current credit situation.

Tip: you should only get a tradeline in the combination credit profile on or after you’ve started credit repair, and you have a short timeframe of 3-4 months to get to your target score.

So, tradelines work well on the tradeline credit and combination profile. 

Trade Line Examples – Meet Jada, Sebastian, and Lindsay 

Jada has a tradeline profile

 Credit Factor Before Tradeline Credit Factor After Tradeline 
Payment History99% B99% B
Credit card usage31% C15% B
Derogatory marks0 A0 A
Credit age1 Yr 3 Mos F2 Yrs 5 Mos D
Total accounts5 F6 D
Hard inquiries3 B3 B
Overall GradeCB

Her overall grade increased from a C to a B. So, she’s the perfect candidate for a tradeline!

Are you new to tradelines?

Lindsay has a credit repair profile

 Credit Factor Before Tradeline Credit Factor After Tradeline 
Payment History97% D97% D
Credit card usage31% C15% B
Derogatory marks6 F6 F
Credit age5 Yr 7 Mos C5 Yrs 7 Mos C
Total accounts20 A21 A
Hard inquiries12 F12 F
Overall GradeDD

So, her profile is unlikely to benefit from a tradeline since her credit age is seasoned because although she has several positive accounts, she also has a handful of negative accounts. 

Her overall grade also didn’t improve and is an indication of having a credit repair profile.

Sebastian has a combination profile

 Credit Factor Before Tradeline Credit Factor After Tradeline 
Payment History98% C99% B
Credit card usage31% C15% B
Derogatory marks3 D3 D
Credit age1 Yr 3 Mos F2 Yrs 5 Mos D
Total accounts5 F6 D
Hard inquiries3 B3 B
Overall GradeDC

So, his profile is likely to benefit from purchasing a tradeline if he’s working on removing the negative time from his credit at the same time, he adds positive accounts to his report.

Are you more like Jada, Lindsay, or Sebastian? If you’re still not sure, we’ve got the perfect tool to help you figure it out.

Your Next Steps: Tradeline Summary

A woman drawing progress from idea to plan and action

Now that you’ve read through our Tradeline beginner guide, are you getting excited yet? You should be!

If you’re new to tradelines, the next step is to create a free account, and we’ll walk you through every step of the way to choosing the right tradeline for you.

For First-timers / Not Your First Rodeo

You may have purchased tradelines in the past, but you’re not sure the best option for you. Try out tradeline analysis! You can punch in your numbers, and we’ll let you know your type of profile and the three best tradeline options.

Have you purchased tradelines in the past but not sure what option works best?

Seasoned Pros

If you are a pro, you know how tradelines for sale work, and you know what you want, then head over to our tradelines page to read our reviews, see what we have available, and complete the quick purchase process.

Are you a Pro and knows exactly what you need?

We’re excited to welcome you to the tradeline family! Don’t hesitate to contact us if you need some extra direction. We love helping people like you get to your goals!

Leave a Comment

Your email address will not be published.