AU Tradelines: What Every Millennial Needs to Know

As a millennial, you’re likely reaching the point in your life where you’re feeling the societal pressure to be an adult, buy a car or a home, or have children. While these major life moments can be exciting, they can also feel incredibly daunting, especially if you’re not as financially stable as you expected to be at this point. If you’re feeling that way, you’re not alone; a significant portion of the millennial generation is feeling the pinch of bad credit and credit delinquency. Lower wages compared to previous generations partnered with a tough economy has meant that millennials have had to turn to some unhealthy debt habits.

If this sounds familiar, it’s not too late to turn things around. By familiarizing yourself with the ins and outs of certain credit-lending mechanisms and how they work, you can then develop strategies to use them responsibly. In this piece, we take a look at AU tradelines and what every millennial needs to know about them.

What Is a Tradeline?

Before we get into the details of what an AU tradeline is, let’s first define what a general tradeline is. A tradeline is a record of activity for any type of credit that has been provided by a lender to a borrower and has been reported to a credit reporting organization, such as credit cards. A tradeline tracks every transaction associated with that borrower’s account. In short, for every credit account you have, you’ll have a tradeline for that account.

What Is an AU Tradeline?

AU tradelines are authorized user tradelines, which are exactly the same as a traditional, general tradelines with one main difference: another individual is placed on the account as an authorized user in addition to the initial borrower. This means that the entire credit history is shared and the user is able to use the credit account freely, but they are under no obligation of repayment. Oftentimes, if someone has poor credit or hasn’t had the chance to build credit yet, another person will bring them onto their tradeline to get them started on the right foot (such as a parent bringing their child onto their tradeline).

Why Are AU Tradelines Important?

AU tradelines are an important financial tool to become familiar with because they help you build credit while offering insight into how you’ve handled your credit in the past. Without this information, you’re essentially making financial decisions in the dark. This context also makes it possible to determine your credit score using a traditional credit scoring method, which is an extremely widely used metric. This will also help bring you one step closer to achieving financial goals, such as buying a car or a home or starting a tuition fund for your future child.

Can You Buy Tradelines?

Yes, you can buy someone else’s tradeline. Essentially, this process refers to paying someone to become an authorized user on their tradeline. Oftentimes, people will opt for this when they are not eligible to take out a tradeline themselves or if they are hesitant to do so.

While you are able to purchase tradelines, there are certain risks associated with this kind of activity. For instance, if the tradeline account holder is irresponsible with the account (e.g. fails to make payments on time), it can negatively impact your credit and derail you from achieving your financial goals.

Similarly, buying tradelines can put you in a risky situation with credit bureaus and lenders. They may perceive the action of buying a tradeline as a deliberate misrepresentation of your financial standing and could then accuse you of committing bank fraud. There are no guarantees that such repercussions will occur, but it’s still worth keeping in mind for your own security.

Will Tradelines Continue to Work in the Future?

Fair Isaac Corporation (FICO) is the creator of the commonly used FICO credit score and the agency has tried targeting tradelines before in the past. They tried to alter their scoring model in an attempt to make tradelines less effective and beneficial. With targeting like this having occurred, it’s only natural to wonder how much longer tradelines will remain effective, if at all.

It can be said with a high degree of confidence that tradelines will continue to work well into the future. This is largely because the credit sector is typically slow to evolve, even with organizations like FICO attempting to change things up. Even if one company did change their scoring processes, it would take decades for such changes to be adopted across the entire financial industry, giving tradeline users plenty of leeway to work with. 

Even though it might feel like you’ve been dealt a rough hand as a millennial, it’s never too late to correct your financial situation. By properly understanding AU tradelines, why they’re important and how they can help you achieve your financial objectives, you’ll set yourself on the path to stronger financial stability.