What is a Tradeline on my Credit Report?
By now, you probably have heard what a credit report is and understand that it is important. You may even know a little bit of information about your credit report. Perhaps, you even pull a copy once a year to review it, making sure there are no surprises.
There are some details about it that are important to understand, but you never heard of them. A tradeline is an important line item on your credit report. If you are wondering what is a tradeline, you should continue reading to find out more.
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What Is a Tradeline on Credit Reports?
Credit reporting companies use the terminology ‘tradeline’ when they are referring to any credit accounts listed on your credit report.
Each account that is listed on your credit report has its own tradeline. The tradeline includes all the needed information about the debt and the creditor.
It does not matter if it is revolving credit or installment loans; they all have a tradeline. Revolving credit encompasses lines of credit and credit cards. Installment loans are mortgages, car loans, personal loans, and student loans.
There is additional information about the account included in the tradeline:
This information includes part of the account number, the address and name of the lender, and the current status.
It also includes when the account was opened and closed if that applies.
This includes information about the current balance and date of the last activity.
It shows your payment history and even your monthly payment amount.
Lenders report this information to the credit bureaus.
How Are They Used?
Not only is it important to know what is a tradeline, but also how it is used by lenders.
A tradeline is typically used to calculate a credit score.
However, a lender may want to know more than just your credit score, so they may choose to dig a little deeper into the tradeline:
A potential lender can see if you are behind paying on an account and how delinquent it is.
Your credit score can take a large hit if you have too much revolving credit (increased credit card use). These factors may cause a lender to deny you credit.
Can a Tradeline Be Removed?
A tradeline can be removed from your credit report.
When you want to know what is a tradeline, it is also critical to know how they appear or disappear from your credit report.
If someone makes you an authorized user on their credit card, it will appear on your credit report. When they remove you as a user, it disappears from your report.
There are other ways a tradeline can fall off your credit report. When there is a negative item on your credit report, such as a credit write off, it can fall off your credit report after a certain period of time. When it falls off your credit report, the tradeline goes with it.
If you notice a tradeline on your credit report that is not yours, you can request that you have it removed once you prove that it is not your item.
How Does a Tradeline Impact My Credit?
While a tradeline impacts your credit, the impact it has depends on the type of tradeline it is.
If it is a positive one, it can help your credit score go up. If it is a positive tradeline and you remove it, it could negatively impact your credit score.
If it is a negative one, it can make your credit score go down. If there is something on your credit report that has a negative impact on your credit score, and it is removed, it may cause your score to go up.
Why Should I Check My Credit Report?
You should have heard before that it is important to review your credit report. This is the information that lenders are using when they make decisions about extending your credit. You should be aware of what is on that report. This empowers you to take control of your credit. You are entitled to one free copy of your credit report every year. You should take advantage of that.
You can request your credit report online and review it. This is an opportunity for you to make corrections to any information that is incorrect.
If you read something on your credit report that does not seem correct to you, do not ignore it. You should reach out to the appropriate credit bureau and request it is removed.
What Does It Mean to Buy a Tradeline?
Buying a tradeline means that you pay a fee to a service that is third-party. The fee for this service can get incredibly high, over a thousand dollars. Purchasing a tradeline causes it to be on your credit report for a limited period of time. You are being added to a random credit card account as an authorized user in an effort to improve your credit score. The intention is to boost your credit score. This may seem helpful to someone that does not have much in the way of credit history.
Is Buying a Tradeline a Bad Idea?
Buying a tradeline is not necessarily the best way to improve your credit score. It is an expensive undertaking as the fees are high. It may appear to a lender as a fraudulent activity because it is not your credit.
You do not even know the person that has added you as an authorizes user on their account. This is stretching the bounds of legal activity. You are representing yourself and your ability to use credit in a false and misleading way to lenders.
There is a new technology used in determining credit scores that is working to eliminate tradelines that have been bought, so it may not be helping you in any way. You are not learning good habits when you are buying tradelines.
Typically, your own behavior would drive your credit report and score. When you buy a tradeline, it is not your behavior that is driving your credit score. You also cannot use the credit card on which you are an authorized user because you do not know the owner of the card. This can also expose you to risk.
What Other Services Might Help Me?
Building credit and protecting your credit are important undertakings. It is essential that you take control of your spending and credit usage so that you can continue to protect your credit that you have worked so hard to build.
The Goalry Mall has many services that can assist you with understanding your credit. We can help you understand the information contained within it and recognize incorrect information. We can help you put credit monitoring services in place. This can help improve your overall credit.
Conclusion
Understanding your credit report is sometimes difficult, but it is always important. Tradelines are important to your credit report, which can have an impact on your creditworthiness. It is important that you understand your credit report and how what is outlined on the report impacts your ability to get loans and credit cards.