How Tradeline Impacts Your Credit Score

Have you been interested in adding a new tradeline to your credit card account? Do you know about this “well-known secret” but not sure what is a tradeline? Quite simply, a tradeline “defines any account that appears on your credit report,” according to Tradeline Supply Company, LLC.

As you can imagine, your credit card account will have activity on it that must be declared to the agency in the event that a tradeline has been added. Tradelines are simply a tool that people with bad credit use to boost their credit. This can be done by a credit-boosting company who receives payment from the bad credit account, and “boosts” their bad credit by pairing them with someone of good credit. Here are 4 ways tradelines will impact your credit score.  

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Damage

Your credit score will be in good standing if you’ve been responsible with your tradeline – meaning it must be open and active for the past six-month period. Only then will the credit scoring calculation be able to create a credit score. However, as you can guess, being irresponsible with your tradeline (such as adding too many authorised users frequently) will dramatically reduce your credit score. The specific number depends on the age of your card, the credit limit, how many AUs there were, etc.

No Guarantees

Once you discover their huge benefits, it may be tempting to take advantage of them as soon as possible. Remember: we’re adding people with bad credit to an account in good standing. As you can already guess, the authorized user is more important to us in this matter. This is because people with bad credit who are added to account with good standing will use that good-standing account’s credit to boost their own credit score.

Activity  

Would you like a higher credit score? Then make sure there are a few (no more than 3) tradelines that are in good standing. This also means missing no payments whatsoever and never maxing out your credit limit in case you use your CC. It will also help to have a thorough mix of credit account types – and to keep them open for two years. Tradelines are issued on two fundamentals: the age of the account and the credit limit. The higher your limit, the more tradelines you will be able to keep active, which will directly raise your score.

Primary Account

As you can imagine, the person who has the primary account shoulders all the responsibility. CC companies and banks do not favour people who use tradelines to raise their credit score—probably because they can’t make money off the people who do—and will promptly shut down the account if anything is suspicious. Understand the risks involved with such a high percentage: you and the primary account may have your cards shut down.

Know in advance though, before you think about getting into the world of tradelines, that buying and selling them may not always work. As you can imagine, credit scoring companies have altered their formulas. Therefore, if you are considering tradelines, it’d be wise to seek the assistance of a company that can provide seasoned authorized user tradelines. That will be the only way for you to be sure that the tradeline works.

Author: Himanshu Agarwal