Trade Lines

Most people have multiple trade lines, so they never become an issue. When they do become an issue is with a lot of first time home buyers. Sometimes these borrowers are living at home for free, so they cannot verify rent, and they not have a car, to show that debt as a trade lines. They may also have only 1 or 2 credit cards. I don’t want this to come across as a bad thing, because having little debt is a good thing. I just want to explain how it will apply to the approval process. The banks would like to see 3 or 4 trade lines that report to the credit bureaus for at least 12 months. Also, if you only have 1 or 2 small ones, like credit cards, you may not receive a credit score from all 3 bureaus. With 1 or 2, you may only receive 1 or 2 scores. Something’s you may do, is if you plan on buying a home in the near future try and get a credit card from a department or local store. If you use it for small purchases and then pay the balance each month. That will help your score quickly. Also, try and keep a record of what is called, non-traditional credit. That is copies of your bills for your car insurance, cell phone, any utilities that may be in your name, a gym membership, or any other group or club that you make a monthly payment to.  Contact your creditors, and ask them for a payment history for your account, if they can give you one that covers the entire time you have been with them, it will help. If you rent from a friend or family member, and pay rent, try to keep copies of cancelled checks. Try not to pay in cash, because you cannot verify that. Finally, even though you may have limited trade lines, some banks will still provide financing if your file is ran thru an automated system and you receive and approval. The automated system looks at your overall profile, so things like; good credit, assets, longevity in your job, etc. carry some weight and can help to attain the automated approval banks are seeking.

• Rate this Post!

  Select Your Rating:

  • 5 Stars (Excellent!)
  • 4 Stars
  • 3 Stars
  • 2 Stars
  • 1 Stars (Poor)

• Share this Post

  Share With A Friend:

  Your Name Your Email

  Friend's Name Friend's Email

  Optional Message

  Send

• Print
• Social Bookmarking

  Add to Bookmarks: