Tradelines are an important part of your credit report. Each account of a credit card, automobile loan, or a mortgage makes up a tradeline. On your credit report, each bureau will specify the amount of the account, the length of time it has been open, and if the payments have been made on time. A bad tradeline, for example, would be a credit card account that has been opened for one year with a $1,000 limit and the cardholder has used up $950 in a short period of time. That would make the tradeline look unfavorable to other lenders.
Another example of a bad tradeline is a credit card holder with an account open for five years with a $5,000 limit in which they have been 30-60 days late on a payment. A good example of a tradeline is a credit card holder with an account open for seven years with a $5,000 limit in which only $1,000 has been used and $4,000 in available credit. The payments have been on time and never late for the entire seven year period. Imagine having five accounts like these on your credit report. This is what translates you into having an 800+ FICO score.
Note: A method commonly used by individuals to quickly boost their credit score by adding tradelines is becoming an authorized user or AU. A person with not as much credit history is added to an account of a person with a long established timely paid account. The person being added to the account does not have access to the account, just the ability of having the tradeline reported favorably on their credit report.
This has been used by parents who add their college bound kids to their credit card accounts so that their credit profile would be established by the time they graduate. Not only would the college student be able to use the account in case of emergency, they would also resist the temptation of opening a credit account that they would not be able to pay back while in school like I did when I was in college.
There are third party companies who have turned this system into a multi-million dollar business. What they do is recruit individuals with perfect credit and seasoned trade lines which are in good standing, and pay for the usage of the account. If you want to improve your credit score quickly, you will pay the third party company to add you to the seasoned tradeline. The benefit is that it would look like you have been in an account in good standing for a long time. This will look favorable to a creditor looking at your new credit report, and will boost your score with this new account being reported as well.
The bureaus have been trying to stop recognizing these tradelines, but it is still acceptable because it would negatively affect those families who have been doing this for their college kids and even husbands who do this for their housewives.
Before you look into paying a third party company to add you onto seasoned tradelines, do research to make sure the company is reputable. There are consumers who have lost thousands of dollars paying to be added on seasoned tradelines with the account never getting reported.
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