In the credit industry, a “tradeline” is a credit account on your credit report. Credit card accounts, mortgages, and personal loans are all examples of a tradeline that appear on a credit report. Tradelines determine your credit score.
Your credit score is a numerical expression of your creditworthiness. It is a three-digit number that ranges between 300- 850. The higher the score is, the better. If you have a good credit score, you will receive benefits such as:
For credit bureaus to calculate your credit score, you must have tradelines on your credit report. If you have a poor credit score, it requires additional effort and time to improve it. The surest way of improving it is by paying your credit and debit dues on time and maintaining a credit utilization of under 35%.
Adding additional tradelines on your credit is another way of improving your credit score. If you make on-time payments and keep your credit utilization low, you will have your credit score increase over time.
The number of tradelines in your credit report also affects your credit score. Too many tradelines may make you look overextended, while too few may show your inexperience with credit.
Unfortunately, credit scoring companies haven’t revealed the exact number of tradelines you need to have a good credit score.
Buying tradelines could be a savior for people suffering from low credit scores. When buying tradelines, someone with a good credit score adds you as a user to one of their credit cards. You could benefit from their positive credit history. Most commonly, it is used to help a family member build their credit by adding them as an authorized user on one of your credit cards. However, this doesn’t necessarily have to be between two family members. It could be an arrangement between two unrelated people as well.
The cost of buying tradelines ranges from a few hundred dollars to over $2000. The price depends on the seller’s credit limit and age of the account. Buying tradelines and adding them to your credit report is not illegal. Tradelines show creditors that someone else’s information is right about you. However, it could be seen as dishonest or as a ‘’piggybacking’’ technique. According to Experian, buying tradelines may be seen as deceiving the lender or even fraud.
Did you know that it’s legal to report your rent payment as a tradeline? Ironically, only 2/10 businesses are taking advantage of the fact that they can add their monthly rent payment as a legal tradeline on their credit report to boost their credit score. Consider adding your rent payment as a tradeline for an improved credit score. It is much cheaper than buying tradelines. Besides, creditors won’t suspect your account is fraudulent.
1. Not Understanding How Tradelines Work
It is common for people to buy or add tradelines on their credit reports without knowing how it works. I recommend that you do your research about tradelines and their types before buying one.
2. Hoping Tradelines will Unfreeze Your Account
Tradelines only add positive information to your credit report. Tradelines won’t be of help if you have credit freezes or fraud alerts on your account. It doesn’t help because new information can’t be added to your credit report.
3. The age factor of Tradelines
The effectiveness of tradelines depends on what is in your credit file and how old your account is. If your account is five years old, a four-year-old tradeline won’t have much impact. However, if your account is 1-2 years old, a four-year-old tradeline would increase your credit score.
4. Not Understanding How Credit Score Work
Before buying and adding tradelines on your credit report, it is essential to understand how credit score affects your general lifestyle. Even if you have a good credit score after buying tradelines, you need to follow a set of rules to maintain it.
Although it could take time, most banks update credit reports with information from credit bureaus every 45 days. If experiencing non posting two months after adding your tradeline, make inquiries at your credit bureau.