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If you have recently looked at your credit report and found that your credit score is less than excellent you may be wondering what DIY credit repair you can do yourself.
One of the first things you are going to want to look at is tradelines. Tradelines that report positive information are an integral part of a good credit score.
3 Ways To Get Free Tradelines
1. Grow Credit
Grow Credit allows you to build credit with the bills that you already have. And best of all, their starting plan is totally free!
With this service, you can use your Grow Credit Mastercard to pay for certain subscriptions. Your payment history on this account will then be reported to the three major credit bureaus.
Keep in mind that Grow Credit’s Mastercard is a virtual credit card that can only be used to pay for certain pre-approved subscription services. Payments are automatic, so you can’t get into debt with this card.
If you want more services beyond the free plan, there are a few different subscription levels to choose from and each one has its own benefits. The only downside appears to be that not all subscriptions can be paid with this card. However, there is a wide range of subscriptions that are included.
If you are making your payments regularly and on time while also following good credit card practices, you should see your credit scores go up. In fact, Grow Credit reports that their average user sees a 51-point increase after using the service for 12 months!
2. Experian BOOST™
Experian BOOST™ is similar to Grow Credit in that it allows you to get credit for payments that wouldn’t otherwise show up on your credit history.
Where it differs from Grow Credit is that it doesn’t require getting a new credit card and any account you pay will report only to your Experian credit report. (Not to the other credit bureaus.)
Experian BOOST™ will report the payment histories for certain bills, such as your internet, streaming services, and electric bills.
Experian scans your bank account and pulls the payments related to those bills. They can then add those accounts to your Experian credit report. You can even choose what positive payment history you want reported.
The only downside is that it only helps boost your Experian credit scores. It won’t boost your credit scores if the lender uses Equifax or TransUnion.
On average, Experian BOOST™ users saw their FICO Score increase by 13 points!
3. No Fee Credit Cards
Another way to get a free tradeline is with a credit card. A credit card without an annual fee is essentially a free tradeline as long as you are not accruing interest or other fees.
Plus having a credit card in your name is a great way to get a revolving tradeline. You will want to make sure that you are still following good practices when it comes to your credit card. These include:
- Keeping your credit utilization ratio below 10%
- Making at least the minimum payments each month
- Paying off the full balance every month if you want to avoid interest
- Making sure your payment history shows on-time payments
Thinking about getting a credit card can be scary, especially if you don’t have credit history or have bad credit. But you can build credit even with bad credit or no credit, and getting a credit card is a crucial step.
There are many credit cards designed for those with bad credit scores, such as the Indigo Mastercard.
This is an unsecured credit card, meaning there is no deposit required. Keep in mind as well that the credit limit tends to be smaller and there could be an annual fee depending on various factors.
You will have to get pre-approved for this card, but it is designed for those with less than stellar credit histories. In fact, people with no credit or with bankruptcies on their credit report have even been approved for this card.
If for some reason you do not qualify for the Indigo Mastercard or other unsecured credit cards you can always look into getting a secured credit card. The credit card issuer requires a deposit with these cards, but they tend to be easier to qualify for.
If you keep up with your payments and build a good payment history the credit card company may take notice and offer you an unsecured credit card.
The Difference Between Primary Tradelines and Authorized Users
Getting a tradeline of your own is a great option. But for some, it may not be possible.
For those who have a negative tradeline/credit history, being an authorized user can be a great way to start improving their credit.
An authorized user is specific to credit cards. Here, someone adds you to their credit card as an additional cardholder.
When they do, that account will usually appear on your credit report with the notation that it is an authorized user tradeline. If the account is paid on time and balances are kept low, it can help your credit scores.
Make sure that the person responsible for the account you are an authorized user on will pay on time. If they fall behind on payments or run up a large balance, it could negatively affect your credit scores.
Primary tradelines are those where you are noted as the primary account holder. This tells the credit bureaus and creditors you are responsible for paying off the debt incurred. They are a great way to build credit.
How Tradelines Work
The term tradelines describe the different accounts you see on your credit report. There are two types of tradelines: revolving and installment.
Installment tradelines are loans such as a mortgage, student loans, etc. Revolving tradelines generally refer to credit cards.
If you want to improve your credit score, getting a free tradeline with positive information can be immensely helpful.
Tradelines provide lots of data to credit bureaus. They report everything from the type of account to account status. This information will appear on your credit report and can affect your credit scores.
Tradelines can help boost your credit scores if you:
- Pay at least the minimum amount due
- Make payments on time
- Avoid maxing out a credit line
If you already have a lot of tradelines, but don’t have a good credit score you may want to look at:
- Lowering your credit utilization ratio
- Paying off a few tradelines
- Diversifying with different account types
- Increasing revolving account payments
- Whether your report lists inaccurate late payment
For those with not enough tradelines or those looking to add some tradelines with a positive history, you may want to consider these options.
How Much Will A Tradeline Boost My Credit?
It is hard to figure out how much a tradeline will boost your credit score.
There are a lot of different factors that come into play here, which include: your current credit score/tradelines, what tradelines you get, and how you use those tradelines.
Keep in mind that individuals with a very limited number of tradelines or credit history will generally see the most benefit from adding tradelines. Those with a good tradeline history and credit scores may generally see less of an impact from another positive tradeline.
On the flip side, those with negative items on their credit report may not see a boost in their credit scores until they have three to four positive tradelines. Someone with a single negative tradeline history may just need one to two positive tradelines.
Because it can be tricky to know how each tradeline will impact your credit score, it is a good idea to keep an eye on your credit score as you add tradelines and pay others off.
If you have new tradelines reporting positive information but still haven’t seen a change in your credit score after several months, you may want to pull your credit report to make sure that tradeline information is reporting.
How Much Does It Cost To Buy A Tradeline?
While you can get a tradeline and overtime use it to build your credit score, some people want faster results.
Those who want to speed up their DIY credit repair and see their credit score to go up faster may buy a seasoned tradeline. Here, you pay someone (usually through a broker) to add you to their account.
Tradelines typically range from $200-$1,500. The cost of the tradeline depends on factors such as the length and type.
Sometimes a tradeline company may have some cheap tradelines for sale, but they will probably be less valuable.
Outside of the cost of buying tradelines, there is another major issue to consider. While buying and selling tradelines isn’t illegal, FICO does not condone the practice.
While the tradeline you purchased will probably show up on your credit report, FICO tries to ensure the account is removed from any credit score calculations.
Since all three credit bureaus, Experian, Equifax, and TransUnion, sell FICO scores, this can be risky and work against you if you are trying to do your own credit repair.
Credit card companies also consider selling authorized user tradelines to be fraud because they are against their Terms and Conditions.
It is better to focus on becoming an authorized user for a family member or someone you know, and slowly build your authorized user tradelines up yourself.
Can Tradelines Hurt Your Credit?
Yes, tradelines can hurt your credit.
Whether it is a primary tradeline or multiple authorized user tradelines information about credit cards, lines of credit, and loans, any negative information related to those will be seen by lenders, credit card issuers, and credit bureaus.
This means that actions such as not making minimum payments, defaulting on a loan, or having a high credit utilization ratio can and will find their way onto your credit report and impact your personal credit score.
It is important to make sure you are in good standing with all the companies you have tradelines with. You also need to be careful when it comes to the number of tradelines you have.
Too many tradelines and it may look like you are heavily relying on debt, while too few can make it hard for a company to assess your ‘creditworthiness’.
To build optimal credit, you want a mix of positive revolving and installment accounts. The Digital Honey recommendation is to get three revolving accounts and one installment account – this is usually more than enough to get you to a 700+ credit score.
Overall, tradelines can be a great asset when it comes to building good credit if they are used correctly. It is also important to make sure you are pulling your free credit report when you can and are reviewing your credit score regularly to see what improvements you can make.
- What Cell Phone Companies Report to Credit Bureaus?
- How to Add Utility Bills to Your Credit Report
- Grow Credit Review
- How Long do Tradelines Stay On Your Credit?
- Tradelines to Build Credit
- Authorized User Tradelines?
- Primary Tradelines
- Rental Tradelines
- Types of Tradelines
- Buy Credit Tradelines
Sydney Englund is a horse crazy girl who loves to travel. After graduating with a degree in Finance and Economics she decided to put the two together and pursue a Masters degree abroad in Financial Economics. When not outdoors she loves to bargain hunt and find ways to make her money go further.