A tradeline is the specific line-item information about each credit account, with details about the name of lender, type of account, payment status, payment history, and other information highlighting the relationship between the lender and account holder. Credit reporting agencies use tradelines to establish FICO scores and assess credit risk.
Credit piggybacking is when a person with good credit adds another person in need of positive credit history as an authorized user to their credit card. The addition of authorized user tradelines allows the person in need of positive credit history to receive the benefits of that account holder’s good credit. This effectively happens when the bank or creditor reports to the credit reporting agencies and a copy of the tradelines is added to the authorized users credit report. A couple of examples are: when parents with good credit add children as authorized users to a credit card account in order to help them build their credit, or when a person adds their spouse to boost the overall household’s credit rating.
Who can benefit the most from credit piggybacking?
- If you are just starting and have no credit
- Anyone with limited credit history
- Someone who might have gone through some tough times in the past, but hasn’t had any recent derogatory items on their credit report.
If you filed for bankruptcy or have had several delinquencies within the last two years, tradelines will not help you.
Sign up for a free consultation with us to ensure you qualify.
Have you ever considered the significant savings that can be achieved by reduced interest rates and an enhanced credit score? A mere 1% reduction in the interest rate can mean not just $500 or $5,000 or $50,000! How about more than $50,000. . .
How, you might ask?
Let’s say for example that you’ve put a $75,000 down payment on a home priced at $350,000, leaving you with a principal balance of $275,000. By plugging the numbers into a simple mortgage calculator, we can see the 5% interest rate results in a monthly payment of $1,913.76, but the 4% rate comes in at $1,750.39 per month, a savings of $163.37… Now, stretch that out over the 30-year term of the mortgage and you’ll realize savings of $58,813.20, almost $60,000.
And what’s the best means for ensuring that you can get your mortgage at the lower rate?
Well, your credit score is going to be one of the biggest factors in determining your mortgage rate. It is imperative to keep your credit score as high as possible.
Lenders look at your overall credit score to determine your credit worthiness, with low scores leading to higher mortgage rates or outright denial of loans, and higher scores making your credit worthiness eligible for lower rates. While the three primary credit reporting agencies—Experian, TransUnion and Equifax—are secretive about their score calculations, FICO scores are calculated by:
• Payment History—35%
• Credit Utilization—30%
• Credit History—15%
• New Credit—10%
• Credit Type and Mix—10%
Improve My Credit Fitness can help you increase your credit score your credit score by adding positive payment history, higher credit limits, and a longer credit history, which covers the three primary elements of their calculations in determining your credit score. We do this by legally adding authorized user tradelines to your overall lending account history. A tradeline is basically the specific line-item information about each credit account, which the credit reporting agencies use to establish credit scores. The legal addition of an authorized user tradeline allows a creditor to “piggyback” on another creditor’s account in order to receive the benefits of that account holder’s good credit.
Sound like a good deal?
Indeed, but that’s not all. Imagine how much more you will save on everything else. What are you waiting for? To learn how we can help you boost your credit score to save serious dollars on your mortgage borrowing costs, schedule a free consultation or contact us today by calling (800) 827-3915.
Disclaimer: This article is intended for informational purposes only. It does not constitute credit repair advice or provision of credit repair services.