I don’t have a “diverse” credit file (I only have credit cards). Can I buy auto tradelines or mortgage tradelines to help improve the “type of credit” aspect of my credit report?
In the most basic answer: No, you can’t buy auto tradelines. Auto tradelines are installment accounts (not revolving credit cards) to which you’re unable to be added as an authorized user. So, there’s no mechanism to add you for any purpose (including increasing your credit score or, as you put it, diversifying your credit profile).
Also, you don’t want to do this. Think about this: You want to be added to a trade-line with low balance for a long period of time. If you’re added to an auto tradeline (which, as discussed above, isn’t possible), it will either have a high balance with a lot of time to pay left to go, or it will have a low balance that’s paid off soon. Either way, you’re not really helping your credit score and you are only hurting your purchasing power.
This same concept applies to mortgage tradelines as well, except the damage to your credit scores (with the higher balances of mortgages) would be much worse.
You’d be better off getting authorized user tradelines to increase your credit score and then applying for an auto loan of your own.
Robbie’s explanation is spot in. In addition, you can be added to an auto loan as a joint account holder. Do NOT do this! You are obligated to pay that person’s auto loan.
If anyone is selling you auto lines, I would be cautious to work with them because the only way this is possible is to be a joint account holder on a stranger’s account.
This is an interesting question and it’s one that I run into every now and then. The answers above give great guidance. If you’re going to have the debt that goes along with a mortgage or auto loan sitting on your credit report, you’ll want it to be your own. If you’re wanting to improve your credit in order to get an auto loan or mortgage, authorized users tradelines can certainly help. If you have more questions or want to look into tradeline options, feel free to give me a call at 321-799-6159 or shoot me an email at firstname.lastname@example.org
Best of luck to you!
So, I know when you log in to the credit monitoring websites they tell you everything great and not so great about your credit. What they don’t break down is the relevance of the factors being identified. As you mentioned you don’t have “diverse” credit. This is an alright problem to have since the diversification of your reports only makes up around 10% of your overall scores (depending on which of the myriad of score models the lender is reviewing).
Payment history, utilization, and length of credit history make up nearly 80% of your score (again depending on the score model). By increasing payment history, minimizing utilization, and extending the length of your credit history, you stand a much better chance of strengthening your lending position for any application. The easiest way to do this is to piggyback onto a seasoned authorized user tradeline.
If you want to have an honest conversation with a tradeline expert you got one right here. When you are ready to realize your credit potential reach out to me!