COVID-19 has undoubtedly tested the American economy in a way it has never been tested before. With so many businesses unable to open and so many Americans unable to patronize them, many companies and small businesses have been brought to their knees. Fortunately, with the economy reopening, and businesses of all sizes are beginning to see a steady stream of customers again, but the process will be slow and painful. For many businesses, COVID-19 simply made it impossible to stay afloat.
However, if you are still in business, you may be wondering how to position yourself for success in a post-COVID-19 economy. You may want to increase your marketing budget or expand your operations, but to do this, you may need a loan from the bank. If you intend to apply for a loan, you will need a good credit score. Fortunately, by adding tradelines to your credit report, you can quickly boost your credit score and get access to the lines of credit your business needs to thrive.
But what exactly are tradelines? Are they legal? How will they impact your credit in the long run? Keep reading to learn more about the benefits of using tradelines to boost your credit rating.
The Importance of Credit
Your credit history is an extremely important factor when it comes to the financial health of your business or personal accounts. Without a good credit score, it can be hard to access important lines of credit such as credit cards, mortgages, and other types of loans. If you are approved for a loan with a low credit score, often, you will be stuck with higher interest rates, meaning you will owe more money in the long-run. However, if you have a good credit score, you will have access to more and better lines of credit with lower interest rates.
Everyone has an individual credit report which contains information about current tradelines and other information relevant to your credit. On your report, three credit reporting agencies will assign you a score ranging from 300 to 850. Anything below 600 is considered poor and anything above 750 is considered excellent. Overall, your credit report is composed of information about your:
- Payment history
- Accounts owed
- Length of credit history
- Credit inquiries
- Types of credit in use
In general, if you pay your bills as agreed upon and pay more than the minimum balance owed, you will have a good credit score. Your credit report does not take the number of lines of credit you have into consideration – you can have as many lines of credit as you want as long as you pay your bills regularly.
What is a Tradeline?
A tradeline is simply any line of credit listed on your credit report. Potential lenders will see these lines of credit when they view your report and use them to decide whether to loan you money. When you buy, or as it is sometimes called, “rent,” a tradeline, you are paying someone willing to add others to their lines of credit as authorized users. Over time, you will benefit from their good credit and your credit score will begin to increase. As time passes, the owner of the primary account will remove you from their account. Buying or renting tradelines is often seen as a quick and efficient way to raise your credit score in a short time.
It is legal to buy or rent tradelines in the United States, and as a matter of fact, “piggybacking,” as it is often called, is relatively commonplace. It is normal for parents to add their adult children to their credit card accounts so they can benefit from higher scores. It is also normal for spouses to add each other as authorized users.
How Long Until a Tradeline Shows on a Credit Report?
Once you buy a tradeline, you are added as an authorized user to someone else’s credit account. The credit issuer will then report your addition to Experian, Equifax, and Transunion. After the credit reporting agencies receive this information, the positive tradeline will be added to your credit report and you will reap the benefits of having an additional line of credit added to your score. If you choose to buy a tradeline, it can take up to 90 days to post to your credit report, primarily because banks send updated information to credit reporting agencies every 45 days.
Contact Coast Tradelines to Get the Credit You Need
In short, using tradelines to increase your credit score can be a great idea in many situations, especially if you or your business needs fast access to cash. Repairing credit in the traditional manner is always a great idea, but it does take time and effort. On the other hand, buying a tradeline and being listed as an authorized user on someone else’s account can boost your score almost immediately. Contact Coast Tradelines today to learn more about our approach to helping you get the credit you need.