How to Obtain Primary Credit Trade Lines

When you accept any credit agreement, you are opening a primary credit trade line.

Primary credit trade lines are simply accounts that will report as a "trade line" on your credit bureau. If you look at a copy of a credit report, there is a section reserved specifically for trade lines, which are the accounts open under that particular consumer's Social Security Number. In order to obtain a primary trade line, you'll need to use your Social Security Number to apply for credit.

Things You'll Need

• Income documents (pay stubs, W-2 forms)

Instructions

1. Pull a valid copy of your credit report. You must know your credit standing prior to applying for any credit. Your report and score will help guide you to the proper lenders. Visit AnnualCreditReport.com to get a free copy from all three credit bureaus--TransUnion, Experian, and Equifax. You should also pay $5 for a copy of your credit score, or FICO score, at AnnualCreditReport.com.

2. Look at your current, open accounts on your report. The credit bureaus assign scores based on a number of factors. One of these is type and number of accounts. Having a large number of revolving trade lines--credit cards, for example--will lower your score.

3. Research loan programs based on your credit score and variety of accounts. As a rule of thumb, a good mix of accounts is one or two credit cards, one or two installment accounts (car loans, mortgages) and one charge card. If you have excellent credit (a FICO score over 720) you should look exclusively at banks and credit unions. If you have weaker credit (a FICO below 650), you may need to look at finance companies, too.

4. Apply for two or three loan programs. Excessive applications (more than six) will generate excessive credit inquiries, which can begin to lower your FICO score. Narrow your options and apply only for those programs you would absolutely accept.

5. Review loan options side-by-side. Take a close look at fees, interest rates and monthly payments. Make sure the loan you choose will help you improve your credit, eliminate debt and save money. Once accepted, this loan will begin reporting as a primary credit trade line.

References

• What Are Trade Lines?
• Bankrate: Credit Scoring and Credit Report Guide
• MSN: How to Read Your Credit Report