How to Sell Tradelines and What You Need to Know

Selling tradelines involves a primary account holder adding another individual as an authorized user to an existing credit account, typically a credit card, for a fee. This practice allows the authorized user to benefit from the primary account holder’s positive credit history, which appears on their own credit report. The goal for the authorized user is to improve their credit score or establish a credit history quickly. For the primary account holder, selling tradelines represents an opportunity to earn income from their credit accounts.

Understanding Tradelines

A tradeline is a record of activity for any credit extended to a borrower and reported to credit reporting agencies. Each credit account has its own tradeline that details its history and status. This information includes the lender’s name, account type, current status, opening date, credit limit or original loan amount, current balance, and payment history. Credit bureaus use these tradelines to calculate a borrower’s credit score, summarizing credit behavior.

When a tradeline is “sold,” it involves adding an authorized user (AU) to a primary credit card account. An authorized user is a person added to an existing credit card account by the primary cardholder. The primary cardholder remains solely responsible for all charges and payments on the account. The key benefit for an authorized user is that the primary account holder’s positive payment history, age of account, and credit limit can be reflected on the authorized user’s credit report, helping them build or improve their own credit history.

The characteristics of a desirable tradeline for selling include a long history, a high credit limit, a perfect payment history, and low credit utilization. Seasoned tradelines, which are credit accounts with a long and positive payment history, are valuable as they demonstrate stability and responsible credit management over time. The basic mechanics involve the primary account holder adding the authorized user, the account history appearing on the authorized user’s credit report, and the primary account holder receiving compensation for this service.

Legal and Ethical Landscape

Adding an authorized user to a credit account is a legal and common practice, used by family members to help build credit. However, the act of selling access to one’s credit history for a fee operates in a less defined area. There are no federal laws prohibiting the sale of tradelines. Credit bureaus and card issuers do not endorse this practice, viewing it as manipulating credit scores rather than reflecting genuine creditworthiness.

The FICO 08 scoring model gives less weight to authorized user accounts compared to primary accounts. While an authorized user account can still appear on a credit report and influence a FICO Score, its impact may be diminished. Ethical concerns arise because selling tradelines can be seen as artificially boosting credit scores, allowing individuals to obtain credit they might not otherwise qualify for, which can put lenders at risk and undermine the integrity of the credit system.

For the seller, risks include credit card companies closing accounts if they detect unusual activity related to selling authorized user slots. While the authorized user does not receive a physical card and cannot directly impact the primary account’s balance or spending, there is a risk of identity compromise if using untrustworthy platforms. The primary account holder remains solely responsible for all debt on the account, regardless of authorized user activity.

Preparing to Sell Tradelines

Before engaging in selling tradelines, assess your existing credit accounts. Identify credit cards with a long history, high credit limits, and a consistent record of on-time payments and low utilization. These accounts are most desirable for authorized users and can command higher compensation. Reviewing your credit reports can help pinpoint accounts that meet these criteria.

Tradeline brokers or platforms require specific information about the accounts you intend to sell. This includes the account number, credit limit, the date the account was opened, and payment and reporting dates. Having this information readily available streamlines the onboarding process with a chosen broker.

Compensation for selling tradelines can vary based on the quality of the credit card, its age and credit limit. Earnings can range from $40 to $550 per authorized user spot. Payments are made by the broker after the authorized user has been added and the tradeline has reported to the credit bureaus.

Choosing a reputable tradeline company or broker is a preparatory step. Researching companies involves transparency, positive customer reviews, and clear terms of service. Prioritize brokers with an established history, as those with several years of experience are more reliable.

The Selling Process

Once preparatory steps are complete, the selling process begins with a chosen tradeline broker or platform. This involves signing up for their service and providing personal and account details. Secure platforms use encrypted communication channels to protect sensitive financial information.

The next step involves adding the authorized user to your credit card account. This action is performed through your credit card issuer’s online portal or by contacting their customer service. You will need to provide the authorized user’s name, date of birth, and Social Security Number. The authorized user does not receive a physical card, and if issued, it is sent to the primary cardholder’s address to prevent unauthorized spending.

After the authorized user is added, the tradeline appears on their credit report after the next statement closes and the account information is reported to the credit bureaus. This reporting can take anywhere from 15 to 45 days, depending on the creditor’s reporting schedule and credit bureaus. Payment from the broker is issued once the tradeline has reported on the authorized user’s credit file.

Monitoring the account is advisable to ensure proper reporting and adherence to terms. This includes verifying that the tradeline appears correctly on the authorized user’s credit report and that payment is received. Most arrangements specify a timeframe for the authorized user to remain on the account, usually one to two months, after which they are removed.