WHAT IS AN AUTHORIZE USER TRADELINE?
In simple terms, a tradeline is a credit line or an account on your credit report. All of your credit cards are tradelines, your car loan is a tradeline and so is your mortgage. For the purpose of improving your credit score quickly, we add you as an authorized user to a credit card tradeline with perfect credit history. As an authorized user, you will not be responsible for payments to the card, but you will benefit from the tradeline’s perfect history on your credit report.
Tradelines provide positive data on three evaluation factors:
Length of History
These factors comprise as much as 60% of your credit score. When we post an AU, you are benefiting from the age of the tradeline, the availability of the limit (always utilized under 10%), and the perfect payment history.
Being added as an Authorized User (AU) on one of our high limit, low balance credit cards that also have a long and perfect payment history. An AU is someone who cannot use the account, cannot make any changes to it, nor do they have the responsibility to repay any balances that might be owed. The original intent of the AU position was to give Primary Cardholders the ability to add their children, spouses, friends or employees to their accounts so they could have access to the available credit line. A coincidental benefit occurs during this process whereby the account history for that credit card appears on the AU’s (your) credit report, and it looks like that credit card’s history has been there since the account was first opened. This “coincidental benefit” gives you an immediate FICO® credit score boost.
While you do not receive the physical card or ability to use the credit line, you will receive the amazing benefit of having that particular credit card “copied and pasted” on to your credit report. This extreme increase in the limit to balance (utilization) ratio and overall average age of the revolving accounts on your credit report gives you the biggest possible FICO® score boost in less than 60 days; and it’s guaranteed!
Do AU Trade Lines Impact Credit Scores?
Despite fear and anxiety to the contrary, Authorized User trade lines continue to report to the credit bureaus and impact credit scores. Nothing has changed, even though many people may try to claim otherwise.
According to the study completed by the Federal Reserve Bank, “…creditors may have to consider all authorized user accounts on an individual’s credit record, regardless of whether they reflect a spousal relationship to an account holder. For this reason, credit history scores, such as the FICO score®, have traditionally accorded authorized user accounts equal weight to the other accounts on an individual’s credit record. If the account has desirable characteristics (such as a low utilization rate or a good payment history), this may improve the authorized user’s credit risk profile and credit scores. The result may be enhanced access to credit and reduced borrowing costs.”
Additionally, the Fair Isaac Corporation (FICO®) also confirmed in Congressional testimony, “After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user tradelines present on the credit report in the FICO 08 model.”
How big of a boost can I expect?
The boost is different for everyone. It all depends on what is currently in your credit report and what you choose to purchase from us. The easiest way to answer this question is to say that there are three “Truths” to boosting your credit score through this method.
The more credit cards we add to your credit report, the bigger the boost will be.
The fewer the number of credit cards that you currently have in your credit report showing as open, the bigger the boost will be.
The higher the limit, and the longer the history for the card(s) you choose to add to your credit report, the bigger the boost will be.
How long does it take to appear on my credit report?
We guarantee that our credit card(s) will appear on at least one of your three credit reports in less than 60 days from the first expected monthly reporting date, or we will give you all your money back. Typically they will appear in less than 30 days; most of the time it takes just a week or two after the first expected monthly reporting date.
How long does the credit card remain on my credit report?
Our Primary Cardholders are required by contract to keep you listed as an Authorized User on their credit card for no less than 60 days. As a result, we guarantee the history of the card you have chosen will remain on your credit report for at least 60 days. In the unexpected event that the card(s) falls off your credit sooner than 60 days, we will either issue a pro-rated refund of your money, or re-add you to the card for an additional reporting cycle, at no additional cost to you. If the card does fall off your credit report after the 60-day lease term expires, and you are still in need of a boosted credit score, we can always renew your lease under the same terms.
Will the bank change my interest rates if and when the Authorized User credit cards fall off my credit report?
Once you close on a loan, the bank is contractually bound to hold those loan terms and conditions as agreed in your contract. They cannot change the terms solely because your status as an Authorized User has been removed after closing. You will likely continue to qualify for the lower rates, as long as your loan closes before, and if, the tradelines fall off your credit report.
What happens after I am removed from the card?
Once your status as an Authorized User with the credit card company has been removed, the card companies tend to leave the account history on your credit report anywhere from 6 months to several years; more than enough time for you to go out and get approved for the loan you need. This long lasting benefit will also grant you the time necessary to continue to build your credit score the traditional way, only with lower interest rates. However, do not procrastinate with your plan as it is still possible for the card to fall off immediately after the 60 days expires. At this point, it is completely outside of our control.
Now that my credit score is boosted, what do I do?
Go out and apply for your loan, apply for the job you wanted, or for premium car or home owners’ insurance! Start your own business! But whatever you do, remember one thing, this is not a ticket for a shopping spree. Be responsible with your new credit score. Be smart. Plan ahead and stick to your plan. It is very easy to succumb to the temptations of the credit world, but it is those of us who can manage our emotions with self-control and logical reasoning who will become masters of our financial future.
Remember, a good credit customer is one who can pay off their ENTIRE balance in full every month. Practice this and it will repay you for the rest of your life.