Your business credit score is a number unique to you. Everything you do when it comes to credit is carefully tracked by credit unions who put together credit reports and assign credit scores. Because so many financial institutions and even insurance companies consider your credit score to make decisions, maintaining the best credit score possible should always be your goal.
If you suffer from a bad business credit score and are looking for ways to improve it fast, you might find one option is to use credit tradelines. Believe it or not, maxing out just one credit card can reduce your score by as many as 45 points. Here we look at tradelines and how much they can actually boost your business credit score.
A tradeline is simply the term used for any credit accounts listed on your credit report. The types of accounts listed include:
On your credit report, you will see all accounts whether you have the account alone (primary tradelines), as a joint account, as an authorized user or as a co-signer.
While the number of tradelines can provide insight for those reviewing your credit report, the major red flags tend to relate to the payment terms and your account status. Since this shows whether you pay your bills and if so whether you pay them on time, it plays a key role in your credit score. You want all your tradelines to report “pays as agreed” as starting at 30 days, payments are considered late. This number can top out at 180 where creditors tend to expect they will never get paid. Each line appears on your credit report for up to seven years. You can see why tradelines are so important to your credit score.
It’s easy to see how multiple tradelines in poor standing can negatively impact your credit score. However, if you can improve the number of positive tradelines on your credit report, you can have a positive effect. “Seasoned” tradelines which appear on your credit score with long-standing records of prompt payments, therefore, are always a good thing. However, because credit scores are so important you have to ensure you have the perfect balance of seasoned tradelines to avoid suspicion. Because there are companies out their who will “sell” tradelines to unsuspecting people with bad credit, they can raise red flags for credit reporters.
Each credit history is different, so the boost you can get from tradelines varies. The more negative items you have on your credit score, the less impact a positive tradeline will have. While this is a very possible solution for many credit scores, the right selection of tradelines will help balance out the problems on your report. A good example is adding business rent reporting as this does not appear on your business credit score.
Credit boosting services claim they can boost your credit score by selling multiple tradelines to your report. However, the nature of these tradelines can come into question. As mentioned, one of the easiest ways to add a seasoned tradeline to your credit report is to add your commercial rent payments. Because most people prioritize rent payments in their budgets, business rent reporting tends to add a positive tradeline to your credit score. They also are not disputed as potentially fraudulent as they speak for themselves and are easily traced. As a result, a service like Debie Rating can boost your business credit score without any risk or costs that are associated with the alternative methods of purchasing seasoned tradelines.
Those without a credit history or who have very little listed on their credit report stand to gain the most from tradelines. However, it is impossible to present hard and true numbers as every case will be different.
Authorized users can add new tradelines as long as they are authorized before their statement date arrives. There are two dates to consider:
With these dates in mind, it can take anywhere from 15 to 45 days for a tradeline to appear on your credit history.
If you would like more information on how you can boost your business credit, speak to the Debie team today.