Trade lines can be used to increase (boost) your credit score for virtually every situation where someone has an average or below average credit score.
The key to having a good credit score is to have multiple tradelines so that even if one tradeline is not perfect your credit score will not tumble because you have other tradelines that you have paid on time and are not maxed out. Let’s take a look at a number of situations that tradelines can be used to improve your credit.
Scenario 1 (Not enough tradelines)
You are in the process of purchasing a house and the lender requires a borrower to have more than one tradeline but you only have one. The way to solve this is to simply purchase a tradeline that has the age your lender requires. If your lender requires your tradelines to be at least two years old then you will have to purchase a tradeline that is at least two years old to qualify for the loan.
Scenario 2 (Maxed out credit or high utilization rate)
Your credit score is low because your tradelines are maxed out or over 50% utilization rate. Utilization rate only applies to revolving credit, not to mortgages or car loans. The way to solve this problem is to purchase enough tradelines to raise your overall credit limit so that your utilization rate falls and your credit score will improve.
Scenario 3 (Your credit is new)
Your credit is new and you want to purchase a car or a house but due to the age of your tradelines, you will probably be denied. The solution to having very new credit is to buy older tradelines.
Scenario 4 (Missed payments, bankruptcy, collections, foreclosure)
Your credit score is low because you missed a payment on a tradeline. Missing a payment (30 days late, 60 days late, etc.) will lower your credit score, however, as time goes by your score will improve. A faster way to improve (boost) your credit score, if it is affected by missed payment, is to buy at least four tradelines for every tradeline you missed a payment for, in order to see a significant increase (boost) in your credit score.
You should not purchase seasoned (authorized) tradelines if you have an ongoing (open) dispute with a credit bureau, wait until the dispute has been resolved.