Jargon in the credit industry makes it difficult for many consumers to understand our credit system. As a result, nearly 40% of Americans report having no idea how their credit scores work¹.

Even concepts as fundamental as “primary tradelines” can sound intimidating and complex when you don’t know the terminology. To help you clear that hurdle, here’s everything you need to know about what primary tradelines are and how they work.

What Are Primary Tradelines?

A tradeline refers to the open and closed accounts in your credit report. Your primary tradelines are the ones in your name for which you’re liable. For example, your credit card, auto loan, and mortgage could all be primary tradelines.

In fact, any time you open up a credit account with a lender who reports to one or more credit bureaus, it’ll show up on your credit report and become a primary tradeline. That includes both installment loans and revolving accounts.

Primary tradelines stand in contrast with authorized user tradelines, which don’t hold you responsible for the account’s balances. Having an authorized user tradeline in your credit report means someone else opened an account and added you to it as a user.

Primary tradelines are essential to building credit in the United States. To optimize your credit score, you need to acquire a diverse mix of primary tradelines and use the accounts responsibly, keeping your balances down and making your payments on time.

How Can You Add Primary Tradelines to Your Credit Report?

The only legitimate way to add primary tradelines to your credit report is to apply for accounts that build credit yourself. Remember, primary tradelines must be in your name. As a result, you generally can’t ask or pay anyone else to open them for you.

For the accounts to show up on your credit report, they must be with a lender who reports to the major credit bureaus: Experian, Equifax, and TransUnion. They’re responsible for organizing your credit history into a cohesive credit report.

Typically, a reputable lender or credit card issuer will report to at least one major credit bureau, but they might not report to all of them since it costs them to pass data along. As a result, you may find your primary tradelines differ slightly between reports.

If you’re trying to build credit, it’s best to focus on getting primary tradelines from lenders that share your activities with each major credit reporting agency.

Typically, you don’t know which credit report your future lender or credit card company will use to calculate your credit score, and the chances are high that you’ll open at least one account with a lender that uses each of them.

If you have bad credit, one of the best ways to get a primary tradeline is to use a secured credit card account. You provide a deposit equal to the card’s credit limit as collateral, lowering the lender’s risk and making it more likely they’ll approve you.

How Do They Differ From Authorized User Tradelines?

Primary tradelines are credit accounts you open in your own name. You’re liable for the balances accrued, and they form the backbone of your credit history. Authorized user tradelines also show up on your credit report, but they’re almost entirely the opposite.

First, authorized user tradelines aren’t primarily in your name. If one shows up on your credit report, someone else opened up the credit card and added you as an authorized user. People often do this for their children to help them build a good credit score early.

Alternatively, they may do it so the child has spending money since you can give authorized users their own copy of the credit card and access to the credit line.

Second, you’re not liable for the balances accrued on your authorized user tradeline. If the primary owner of the account defaults, it may hurt your credit score, but the lender won’t be able to collect from you.

Finally, authorized user tradelines don’t impact your credit score as much as primary tradelines. FICO and VantageScore, the two primary credit score providers in the United States, recognize that you’re not actually responsible for the account.

Because you’re not necessarily the one making payments on the account, it only says so much about your ability to handle credit. As a result, an authorized user tradeline in good standing won’t improve your score as much as a positive primary tradeline.

How Much Do Primary Tradelines Cost?

Typically, primary tradelines shouldn’t cost you anything. Remember, the credit account has to be in your name. The only thing you should be paying is the annual fee if there even is one.

People may say otherwise, but you generally can’t buy a primary tradeline. By definition, you have to open an account with a financial institution yourself for it to be a primary tradeline. If you buy one from a third party, you won’t be the primary account holder.

That means you can usually only buy authorized user tradelines. Tradeline brokers let you pay to piggyback off of someone’s good credit tradeline for a time.

Authorized user tradelines vary in price, costing hundreds to thousands of dollars. An account that’s been well-established for years, known as a seasoned tradeline, will be the most expensive because it’ll generally benefit you most.

Don’t trust anyone who tries to sell you seasoned primary tradelines. They may be trying to convince you that they can sell you a seasoned primary tradeline rather than an authorized user tradeline to get you to pay a higher price.

Is It Legal To Buy Authorized User Tradelines?

Technically, it is legal to buy authorized user tradelines. The law doesn’t prohibit you from paying someone to add you to their account. However, a tradeline company may try to sell you a fraudulent credit account.

In simple terms, these tradelines can belong to fake or stolen identities, which puts the seller in violation of the law. So while you’re not doing anything illegal by buying tradelines, you could still get entangled in something problematic.

All that said, even buying from reputable tradeline companies is risky. Lenders, credit reporting agencies, and credit score providers frown upon the practice. They consider it fraud and against their Terms and Conditions.

As a result, several measures are in place to discourage people from buying authorized user tradelines. For example, FICO Score 8 is designed to catch these accounts and diminish their impact on your credit.

If you’re looking to increase your credit score by acquiring tradelines, CreditStrong is a far better option. We offer credit builder loans, which use your loan proceeds as collateral like a secured card, so we don’t have to check for a minimum credit score.

If you open a CreditStrong account, you’ll get a primary tradeline on all three credit reports. Give it a try today!

How To Avoid Scams

Unfortunately, scams are rampant in the credit industry. It’s full of desperate individuals in financial distress, which is a perfect recipe for vulnerability.

The best way to avoid these scams is to educate yourself. Learn how the credit system works and the best ways to build your credit score. It’ll be much easier to recognize when people try to sell you something unnecessary or ineffective.

It’s also a good idea to brush up on the strategies that scammers have used in the past. Though their approaches change, they’re often variations of the same tactics.

The Federal Trade Commission and the Consumer Financial Protection Bureau provide resources to help consumers recognize con artists, including lists of scams that people have complained about.

If nothing else, maintain a healthy degree of skepticism whenever someone pressures you to give them money or sensitive information, especially if they use fear or intimidation tactics.

CreditStrong helps improve your credit and can positively impact the factors that determine 90% of your FICO score.

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