Trade-Lines are any credit or installment loans that reflect a balance, payment and monthly agreement on your credit report.In addition to tradelines, most lenders will like to see your credit lines open for 12 - 24 months. They will also typically require a minimum amount extended out to you. Check with your mortgage professional to find out their requirements.
It is always best to get a free copy of your credit report once a year, and then show it to a mortgage professional. They will tell you if it would be in your best interest to open other trade lines, or if you will be able to qualify with what you have.
If you want a conforming loan you must have a minimum of 3 but preferable of 5 active tradelines. They need to be established and at least one must have a high balance of at least 5k. It is best to speak with a mortgage professional to understand what is expected of you.
While conforming lenders require three to four open tradelines, many subprime banks do not care for tradelines at all.
Some lenders will consider alternate trade lines. Often, these are monthly bills such as your power bill, water and sewer bill, telephone bill, etc.
If lack of credit is a problem ask you preferred mortgage professional about using alternate tradelines.
If you are a co-singer on a loan or credit card, or an authorized user, that account will show up on your credit report as a trade line. If you are an authorized user, or a co-signer on any account for anyone you are just as responsible for that debt as the other person.
Most lenders want to see a minimum of 3 trade lines on your credit report. They require tradelines on your credit report to show that you have established a credit history. A trade line is any item that is reported to your credit report monthly. The longer theses tradelines have been established for, usually the higher your credit score.
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