Which type of TRADELINE is better, authorized user tradelines or PRIMARY TRADELINES? This would be conditional. Let’s look at the details for each type of TRADELINE to create some type of gauge for our comparison.
An authorized user tradeline can:
- enhance your credit reports (which may result in adjustments to your credit ratings), though you don’t have full control over the account
- potentially grant you access to funds you did not previously have, or may not be in a position to acquire yourself
- Be easy to acquire – a friend or a family member can add you their account, or you could seek a third party brokerage that manages accounts for authorized user reporting
An important point to consider would be (THIS IS A BIG ONE)…lenders (the people in charge of approving you for any credit you are applying for) KNOW that you are not fully responsible for the account.
Why does this matter?
Well based upon the type of application, lenders may choose to not observe any authorized user tradeline (this option is typically outlined in the underwriting guidelines of the application).
Also, authorized user tradelines are typically only revolving account tradelines (credit cards). While these types of accounts do make up a substantial portion of your credit, there are still gaps which they simply cannot fill as diversification on your reports is a point of consideration for lenders (if you’re applying for an auto loan the lender likes to see AUTO TRADELINES on the reports at some point).
In contrast, a PRIMARY TRADELINE is an account in which you are considered fully responsible from both a credit, and financial perspective. It can be any type of TRADELINE (i.e. MORTGAGE, AUTO, INSTALLMENT, or revolving).
Seems like a slam dunk right?
Hold up a minute! The only way to acquire a PRIMARY TRADELINE (for the longest time) was to go and apply for one with a lender…which would be a brand new account that you would need to manage and build over time. This is a traditional building process necessary as part of the lending process.
What if you could acquire AGED PRIMARY TRADELINES (accounts which are viewed on your reports as fully responsible, and are not NEW TRADELINES). This would be the best of both worlds!!! You could easily fill in any gaps on your reports, and get around the time necessary to traditionally build a PRIMARY TRADELINE.