Increase FICO With Tradelines

According to the MyFico website, your FICO credit score is a three-digit number that ranges from 300 to 850 and is based on the information contained in your credit report. A tradeline is any credit account that appears on your credit report, and to have a good credit score, you must have positive tradelines. It's important to understand how to add tradelines to your credit report to increase your FICO score.

Identification

Your FICO score has five components, according to MyFico: 35 percent is based on your payment history (whether you pay bills on time), 30 percent measures how much debt you have, 15 percent is based on the length of your credit history, 10 percent reflects the types of credit that you have and 10 percent considers how much new credit you have. FICO calculates all five to arrive at one individual score for you.

Significance

Your FICO score isn't a stagnant number. It fluctuates as data within your credit report changes. To improve your score, FICO suggests making payments on time on all your accounts. According to Bankrate, adding new and positive accounts can help improve your score, especially if you have negative accounts on your report. FICO places more emphasis on newer accounts than on old ones. As the negative accounts age, the newer positive accounts will have more significance in your score calculations, and that helps increase your score over time.

Considerations

You can add tradelines to your account by applying for a new credit card that reports to all three credit bureaus. If you have poor credit, it may be difficult to obtain a traditional card. Instead, you may consider a secured credit card. A secured credit card requires a deposit equal to your credit limit. This deposit is held by the issuing bank in a savings account or certificate of deposit. The issuer reports the card to the bureaus, and on-time payments on the card improve your score. You should only apply for secured credit cards from established banks to avoid any potential scams.

Warning

If you have a spouse or relative with good credit, you can ask that person to add you as an authorized user to his account. Once your name is added, the positive account history from that account will appear on your credit report and help increase your FICO score. However, any subsequent negative activity on that account, such as late payments, also appears on your credit report and causes your score to drop.