Tradelines that are posted to your credit report as authorized users are effectively credit accounts. This means that even if you are not responsible for making payments on the account, you still gain from the good credit utilization and payment history. The fact that credit bureaus permit customers to add authorized users to their accounts demonstrates the validity of authorized user tradelines.
It’s crucial to remember, though, that not all tradelines are made equal. There are good businesses that offer tradelines from authorized users, but there are also dishonest and fraudulent businesses that sell phony tradelines. It is crucial to conduct due diligence and only cooperate with respectable businesses who have a solid track record.
There are various ways to establish your business credit if you don’t want to use your personal credit. One choice is to register a business bank account, apply for a business credit card, and make prompt payments on any accounts held in the company’s name to develop a business credit profile. Another choice is to build trade credit with suppliers and vendors who provide information to the credit agencies.
Another choice for establishing company credit is to use your EIN number as identification. The IRS uses an EIN, or employment identification number, to identify firms for tax-related purposes. To open an account in the business’s name with a lender or credit card company, you might need to provide your EIN. You may keep your personal and company credit separate by applying for credit using your EIN.
It’s against the law to use a CPN, or credit privacy number. A nine-digit number called a CPN is advertised as a Social Security number substitute. However, it is against the law to use a CPN to falsely represent your identity or seek for credit. You may be subject to fines and possibly jail time if you are found using a CPN fraudulently.
Depending on the borrower’s credit score and other variables, the Federal Housing Administration may need a different number of tradelines. In general, more tradelines are required for borrowers with lower credit scores to be approved for an FHA loan. The FHA does not, however, specify a minimum quantity of tradelines.
Authorized user tradelines are legitimate, but it’s crucial to interact with trustworthy businesses and be aware of the risks. A company credit profile, an EIN number, or trade credit can all be used to build business credit without utilizing personal credit. Using a CPN is prohibited and has serious repercussions. Depending on the specific situation, the FHA may need a different number of tradelines.