What Are They?
Primary Tradelines is credit industry jargon for a credit line IN YOUR PERSONAL NAME, be it revolving credit card, installment loan, mortgage loan, or any other line of credit that appears on your credit report.
Why Are They Important?
Consumers have been force fed the idea that they should focus entirely on their credit scores when viewing their credit reports, the problem with that logic is that your credit score is made up of many components, one of which is tradelines, especially primary tradelines.
When a lender looks at a credit report the first thing they look for is the credit score, the second thing they look for is the existence of primary tradelines, if you meet the score requirement and don’t meet the primary tradeline requirement your loan will be denied EVEN if your credit score is very high.
Lenders want to confirm that the credit score shown has been generated using credit lines that are in YOUR NAME as opposed to authorized user tradelines that are sometimes used to try to trick the lenders.
As mentioned above lenders will always look at your credit report to see that you meet their minimum score requirement and then they will check to see that you meet their primary tradeline requirement. Although every lender will be different it is good to know some of the generic guidelines so you can be better prepared
Most lenders will not only require that you have primary tradelines but will require that you have a specific number of them. When I worked in the mortgage industry we required that the consumer have a minimum of 3 primary tradelines in order to qualify for a mortgage loan.
This means if you only have 2 primary tradelines you would be one short of qualifying. I recommend that you find out from your lender how many tradelines they require to show on your credit report in order to qualify.
In addition to count requirements most lenders who will only count a primary tradeline that meets their specific age requirements. In the mortgage industry we generally didn’t count a primary tradeline unless it was at least a year old.
This means if you have the score needed and you have 5 tradelines but only 1 of them is over a year old you wouldn’t qualify for a loan. I would also ask your lender when discussing tradelines with them not only how many do you need but how old they need to be.
(IMPORTANT: READ OUR ARTICLE ON AGED PRIMARY TRADELINES IF YOU ARE CONSIDERING PURCHASING ONE)