Tradelines – “Piggybacking Your Credit”

In a Nutshell: You put someone on your credit card (as an Authorized User) so that it reflects to the credit bureaus for the person. That person gets a boost in credit score and they pay you for that. 

Many people are unable to qualify for credit cards due to poor credit.

People buy tradelines to increase their credit score to get better loan rates and to reduce their (car and homeowner) insurance costs. This is not for credit repair.

Where there is a need there is someone making a profit!

We call this “Tradelines.” And there is a market to sell these tradelines for others to use so Authorized Users (AU) can increase their credit score. So in a way, there is a feel good feeling with this where the losers are the credit card and insurance companies.

A tradeline is what a bank (Chase, Barclays, Bank of America, Discover, or Capital One) calls a line of credit. Therefore your credit card is a tradeline.

Another term for (you) this is called a credit partner – think of you being a landlord for your credit but you never see your tenants nor do they mess up your credit. A credit partner is someone who sells the right for someone else to be temporarily added as an authorized user (AU) on their credit cards. Normally the AU stays on the account for only a couple months and then is removed. The credit partner (you) receives a commission for each authorized user added.

To date earnings!!!

2-5-19 –  Capital One – $12,500 credit line for 2011 = $175

2-6-19 – Chase – $22,800 credit line from 2007 = $325

2-7-19 – Chase – $22,800 credit line from 2007 = $325

2-16-19 –  Capital One – $12,500 credit line for 2011 = $175

2-23-19 – Citi – $6,100.00 credit line from 2016 = $100

2-23-19 – Chase – $36,000 credit line from 2016 = $275

3-5-19 – Barclays – $15,000 credit line from 2017 = $100

3-7-19 – Barclays – $15,000 credit line from 2017 = $100

3-21-19 – Citi – $5,600 credit line from 2017 = $100

Next one… any day now… how fun!!!

I love how you can make a custom credit card image with Capital One!

Why rent out my credit?

Make $5-10K (taxed as ordinary income via 1099) with minimal effort from a Tradeline Supply Company.

When an AU who gets added will stay on the card for approximately 60 days you will get paid commission. The AU will not receive a credit card and is not allowed to spend any money on your account.  The card will only be sent to the primary account holder’s address and many banks even allow the option of checking a box so that a card is not even issued at all.  Additional security measures can be taken by setting up alerts on your accounts and phone passwords to be extra safe.

A typical commission schedule is as follows:

Credit Partner Commission Schedule
Credit Limit Card age Card age Card age
2 Years – 4 years 5 Years – 9 years 10 Years +
$2,000 – $4,999 $35 $60 $100
$5,000 – $9,999 $50 $75 $125
$10,000-$14,999 $100 $150 $225
$15,000 – $19,999 $100 $175 $250
$20,000-$29,999 $150 $225 $275
$30,000-$39,999 $200 $275 $300
$40,000+ $275 $300 $350

Note: I have seen new cards get as much at $100 per AU

Why won’t some 2 year and younger credit lines get accepted? Unfortunately we are not enrolling any more cards that are less than 2 years old.  If a card is three or four months away from being eligible, we can round it up, which was the case with your Barclays. We’ve actually had the discussion of removing unaged inventory from our list, so the truth is we do not want unaged inventory, despite the fact that we can easily sell it.  Many people buy it because the price is lower, and then complain to us later that they did not get any good results, and in some cases it can even lower their credit score.  This is obviously not good for our business to sell something that does not provide positive results.  On the other hand, people with practically nothing in their credit file still might benefit from an unaged account.  The problem is there are a lot of people who buy it and do not benefit and we have to deal with unhappy customers which is something that we strive to avoid by reducing/eliminating this possibility.  

No capital outlay invested.

I have contacted many different companies in the tradelines space, & have identified one that appears to be the most professional, pays the most, & has the best communication, which is Tradeline Supply Company. These guys also have a realty business, so they’re familiar with operating a business. Here is the link to their website.

Seems like a situation where identity theft can happen however you know who your AU are but they don’t know who you are 😁 In other words,  an AU cannot disappear on you or spend all your money because when you use a company acting as the clearinghouse there is separation.

This is great for those people who have tapped out their liquidity and retirement accounts. Please don’t sell any body parts or rob a bank!

How will this affect my credit?

Note that 680 is usually all you need to get the top tier Fannie or Freddie loan. Today because I am no longer a homeowner and I do more private placements I don’t really need personal credit. So that means I get to play around with all the Travel Hacking credit cards I want. Of course I, double dip with Tradelines as I the new credit cards season at least two years.

Why do people need a good credit score, to begin with?

How to do it?

You need a credit card at least two years old (this is called seasoned line) with no late payments on it’s record. It is also recommended that you need a clean credit history with no delinquencies in the last year.  The longer you’ve held the card and the higher the credit limit ($10,000+) the better and the more cards the better. You need to use these credit cards and pay it off in full each month.

There are a few Tradeline companies (Here is one) acting as the intermediary but let me know if you would like a warm referral to one so you can talk to a live body.

After an AU is on-boarded to your tradeline for several months and they have seen their score rise you remove them as an AU and a check is mailed to you (direct deposit actually).

This is the screen that the AU sees when they sees your and others options. These are the prices they pay so minus the intermdiary fee and that’s what you make.

The Process

  • Open a free account at Credit Karma to see a list of all your accounts. This will let you know where you stand in terms of credit limits, payment history, date opened, current utilization, and each account’s reporting date.
  • Research companies brokering tradelines. Verify the account verification process with them. For good reason, banks don’t really like this little muse. When vetting Tradeline companies ask for proof they are collecting all required documents and running a LexisNexis background on each client.
  • Try to call your credit card issuers to increase your available credit. They will ask for household income and some of you have a big house. This is a loose term 😉 The only cards that run your credit for credit limit increase requests are Chase & Barclays. So make sure to request those last (if applicable). Note that most people will get approved for $5,000-$15,000 per card. I have been screwing around with credit cards since my travel-hacking days since the early 2000’s and have some nice limits already so I am going for the moon! ($30,000+)
  • It might make zero impact on getting more credit but I always answered yes to questions about cash advances or balance transfering because I figure the bank will like it if I moved other balances from other banks to them.
  • If you have some accounts with an annual fee (perhaps you got for the points and might close you might want to not increase the limit on because when you do close the account it will be a bigger impact on the card… its up to you
  • I tried to apply to new cards more for the long term future (5+ years) you might get a big credit line that might get $100 per AU. I applied in the following order:
    • Capital One® Quicksilver® Cash Rewards Credit Card – https://applynow.capitalone.com/?productId=5133 – The plan here is to put all new purchases here and pay off or use the Chase Slate’s 0% balance transfer rate and zero balance transfer fee to shift over the remaining balance in 15 months.
    • Whoohooo! Instant success (just as I am writing this article) $30,000 line equals = $600 bucks every few months pending AU.
    • In 14-15 months from now the game plan is to apply for the Chase Slate: 0% for 15 months on balance transfers, $0 balance transfer fee for 60 days, $0 annual fee. This way I can take a balance transfer check and max the card out and pay the minimums for 15 months.
    • 2-3 years from now the plan is to get the Chase Freedom Unlimited (if it’s still around) to do the similar thing. The reason I am doing this last is because unlike the Slate card which has 0% balance transfer fee the Chase Freedom Unlimited card has a 3% balance transfer fee. The Quicksilver card is superior because I get 1.5% cashback instead of dumb Chase Ultimate Rewards point. https://creditcards.chase.com/freedom-credit-cards/unlimited
  • Citi Bank – I did this online. I believe they do not all Costco cards because those cannot have AUs but if it increases your credit limit that can help your future credit score due to decreased utilization rate. (Update – I did get one card up from $17K to $24K)
  • American Express – Did this all online too. My Platinum Card was not able to increase the limit via the online portal. I did not want to call in because I did not want to waste my time (#Pareto 80/20) but calling someone and being nice has been known to work. They told me they would get back to me in 7 days.
  • Capital One – They told me “You’ll receive a document in the Online Document Center with the outcome of our review in approximately 2-3 business days. We’ll also send you an e-mail asking you to visit the Online Document Center when it’s available.”
  • Barclays (Do at end with Chase)
  • Chase – I had to call 800-242-7338. They do a hard credit pull so again do this one last. In my experience, I increased my $17,000 credit limit to $18,500 another one $5,000 to $17,000 (heck yea!) and the last one (business card… those guys had me on the phone for about 20 minutes as they really wanted to understand my business) required 7-10 day review.
  • Choose which credit cards or tradelines you wish to sell.
  • Wait till you get an email alerting you that you sold one of your tradelines. Follow their instructions for adding the AU.
  • Here is a sample:
  • Thank you for submitting your credit partner verification information in order to receive a custom quote.  We have reviewed your tradelines and the accounts listed below have been selected based on our current qualification criteria.  We are currently only working with a very limited number of banks who have proven to be reliable for authorized user postings.

    If you are ready to move forward based on these commissions per authorized user, please respond back to this email and type back into the grid below two pieces of info:

    • The number of authorized users you are requesting that we sell per card (We have offered a suggested number of AU’s to add, but you are welcome to modify that based on your own comfort level)
    • The last 4 digits of your credit card number so we can reference the proper card in our communications with you.  (This information will not be given out to anyone else)
    • We will send you the Credit Partner Agreement to sign via Docusign for your CapOne, the two Chase cards, and the Barclays.  Below is the adjusted commission for your Chase cards based on your new credit limits.  How many AU’s would you like to allow for the Barclays (6 max)?  Once the Agreement is signed, we get your cards added to the inventory.   While your cards are being added to the inventory, you will receive a Credit Partner introdction email.  This intro email will explain how to log into your new Credit Partner Portal for the first time.  It will also explain how to confirm your orders once a new order is received.  Feel free to call us anytime with any questions.  We look forward to working with you!
    Bank Name Credit Limit Date Opened Commission Payout Max # AU’s Requested # AU’s Last 4 Digits of Credit Card Potential Annual $
    Chase $30,000 12/2016 $275 2 $3,000
    Chase $19,000 11/2007 $325 2 $3,600
    Capital One $12,500 12/2011 $175 2 $2,100

    Another Tradline company gave me $100/AU for my Barclays card opened in May 2017.

  • Also, please be aware that some Chase cards do charge a $75 annual fee per authorized user so please go through their website as if you were adding an authorized user and see if that fee applies to each of your particular accounts. A disclaimer will usually pop up notifying you of that.  By moving forward with us on your Chase card(s) we are assuming you checked on this detail and have confirmed this does not apply to your cards.  If it does you are also able to downgrade the account to a type that does not have the fee.

  • Once we receive your reply we will send you our credit partner agreement paperwork via Docusign for you to electronically sign.

    Our commissions do change regularly, so this commission quote will be honored if you sign up within next 14 days.

  • Again here is the process:
    • When you receive a new order from an AU via text or email
    • Log in to your Portal
    • Click Order Details-> New Orders-> AU Details
    • Use the AU details to add the AU on your credit card company’s website
    • Come back to your portal and click “Confirm” under New Orders
    • Then come back to your portal and click the confirm button.
    • 60 days later, after the tradeline has reported successfully for 2 reporting cycles, we’ll send you a removal/commission notification
    • Then the cycle starts over for that particular spot.
  • When you get an order its a little weird. You get their name, DOB, SSN.
  • The credit card company will send YOU a card for the new AU. It’s a best practice not to activate the card just to be extra safe.
  • In two to three months the Tradeline company will inform you to remove the authorized user. Follow the instructions on how to remove an AU from your credit card.
  • Keep an Excel spreadsheet listing all AUs, when you added them, which card added to, when the AU is removed and when you get paid. At some point, I’ll create one for us Hui Members. Ping me in mid-2019 if its not up yet.
  • Collect a check and feel good that you helped someone.
  • Rinse, wash, repeat.

Other notes:

  • Keep the number of AU to under two per card. Better yet stick with one until you get comfortable.
  • American Express cards are poor at posting rates to the Credit Bureaus so they are unreliable with regards to boosting the credit scores of those authorized users and therefore not in play
  • Citi cards are able to move around credit from one card to another. With many of the thresholds at 20k to be a useful card you might think about calling up the bank to combine smaller cards to one bigger one.
  • Don’t have more than one Tradeline Company deal with one card
  • Look for AU good payment history, low (<10%) utilization and a long (5+ years) account history. Use the 3 Credit Bureaus (TransUnion, Equifax, & Experian) receive a consumer’s credit card history from the consumer’s bank(s) every billing cycle
  • Keep your personal and business cards that you are using for yourself separate from the Tradeline accounts
  • Make sure all AUs stay on your card for 90 days minimum. See Cons for an explanation.
  • Your balance should be paid in full each month and should never exceed 10% of the credit limit.
  • The AU is not around to spend on your card. But you have to have your spend on your card with AUs is a must.
  • Tradeline allows up to 6 AUs at a time for Barclays cards. 3-4 AUs at a time on my Citi card but when starting out you might want to start out slow or risk being flagged for fraud. It might be best practice to keep it to 2 AU per card.
  • A background check on all clients is an absolute MUST!
  • Some cards that require an annual fee might charge a fee to add authorized users so this may not make sense.
  • I know its a little weird… but so was Ebay (shipping payment off hoping to get your stuff) and Uber (jumping in a strangers car)
  • Update 19.02.18 – recent Bank of America audit, reduce the available number of AUs for sale to just one AU per card.

Cons

This may not be for some of the higher income earners of the Hui Deal Pipeline Club members who have families that take up most of their free time.

A minority of the time the bank may email or call requesting a call back to confirm the addition of the AU. They may question the relationship to the AU and you can respond.. “a friend or business partner”

It can get complicated to keep organized of all the logins to your bank accounts to get the authorized user’s information.

The illegal issues lay with tradeline companies not doing adequate background checks. This is why it is important to vet any tradeline company before signing up with them. The rub is that this stuff cannot be sold to AU as credit repair and money can’t be collected up front from the client. The issues come up when the tradeline company takes a shortcut and there is a liability risk to the tradeline company.

Only work with the very best banks for this program they need to be reliable when posting authorized user (AU) data to people’s credit reports. Preferred banks are: Barclays, Discover, Capital One, Chase, Bank Of America, Elan (Note Barclays allows 6 AUs per account where others allow 2 AU per account.

When your tradeline company tells you to remove an AU from a card, DON’T DO IT, unless at least two months have passed, preferably three.  If you slap additional AUs on and off a card too fast the bank will cancel your card. Selling tradelines may not be illegal, but the bank will not like it if they know what you are doing, cancel your card and tell you to not come back. As a general rule make sure all AUs stay on your card for 90 days minimum.

Your balance should be paid in full each month and should never exceed 10% of the credit limit. This is where an organized spreadsheet is critical. Build a conditional format on your spreadsheet to monitor this actively.

I have done my research and I would like you to go through the process too. If only to minimize the risk that you folks coming back to me winning that your card got canceled cause you did not know what you were doing. Here is the deal vet two companies and let me know which one you are going with and all give you my opinion and even introduce you to “my guy.”

You want to be with a company who has a high sales volume and pays fair commissions but minimizes your risk of getting your cards shut down. Plus you want the Tradeline company to be running background checks on the people who are borrowing your credit.

Reach out to me as a Hui Deal Pipeline Club member and I can refer you over to who I am using.

Resources:

Want to hack your credit to boost your score? To do these cool things?

Superior Tradelines

If you need a referral shoot me an email… if you are a Hui Deal Pipeline Club member: