Your credit can have a big impact on how you spend and save for years to come. Don’t resign yourself to living with bad credit until negative marks drop off of your report in the distant future. Instead, start doing what you can now. Taking advantage of a new tradeline can give your score a boost. Adding yourself as an authorized user to another person’s account can breathe new life into your credit report and have a positive effect on your overall score.
How Do Tradelines Affect Your Credit?
A tradeline is any line of credit that appears on your full consumer credit report. Your report shows the balances and status of each individual tradeline. Collectively, the information contained within the report serves as the basis for your consumer credit score. Your payment history and the accounts that you owe money on comprise more than half of your credit score, and the length of your credit history from each tradeline in addition to the types of credit that you use make up most of the remainder. Delinquency status on outstanding obligations or overutilization of a credit card can drag your report down, so adding a tradeline with a positive history can be a significant advantage.
How Can You Use Someone Else’s Tradeline in Your Credit Report?
Being an authorized user on a line of credit offers the almost immediate benefit of incorporating a tradeline into your own credit report. Instead of adding information from the time that you were added as an authorized user, you’ll be adding information from the entire history of the tradeline. In effect, this means that you can add years of positive payment history onto your account all at once.
Whose Tradeline Can You Use?
Adding someone onto a credit card is common within families, and it’s often used as a strategy for parents to help children who are young adults establish good credit. However, it’s also possible to purchase access to a tradeline from a third-party broker. Although the transaction is viewed somewhat like a sale, it’s technically a rental. You don’t have a vested interest in a tradeline that you’re paying for access to, and the account holder can have you remove you as an authorized user at any time.
What Is Involved in Buying a Tradeline?
The practice of buying a tradeline to raise your credit score isn’t prohibited by law, and it’s becoming an increasingly popular tactic among credit repair service providers. Nevertheless, you should be aware that not all companies who are reviewing your detailed credit report will look at purchasing a tradeline favorably. Companies use the information in your report to make decisions about your payment history and your ability to make consistent payments going forward. When you incorporate a tradeline into your report that isn’t truly yours, they may view it as a misrepresentation.
How Does a New Tradeline Get on Your Credit Report?
After you’ve bought a tradeline and you’re added as an authorized user to someone’s line of credit or credit card, the creditor will notify the three major credit reporting bureaus. Equifax, TransUnion and Experian will then update your report to reflect the new tradeline. This process may happen relatively quickly, or it may take up to 90 days to process. Most financial institutions send updates to the credit bureaus every 45 days. You should be mindful about the possibility that you may have to wait several weeks or a few months in case you’re looking to build credit for a specific application that is going to be reviewed in the near future. Some advance planning can help raise your score in time to spare you from the high interest rates associated with bad credit mortgages or other bad credit loans.
How Much Can a New Tradeline Raise Your Credit?
Each credit reporting bureau uses a slightly different formulaic approach to how they calculate your score, so there’s no universal metric to determine how much a new positive tradeline will help you. A few different factors can influence the weight of the new tradeline and how much it will offset any existing negative tradelines. Some of these factors include the available credit on the tradeline, how much of it is being used, whether payments have been made regularly, and the age of the account. Ultimately, there isn’t any way to guarantee that adding a new tradeline will have the effect that you’re hoping for.Fixing your credit can seem time-consuming and somewhat complex, but it’s really important that you do everything possible to make raising your consumer credit score as manageable and expedient as possible. The sooner you get damaged credit back on track, the sooner it will become easy for you to maintain a positive score. Reach out to the experts at Coast Tradelines to learn more about how you can raise your credit score with a new tradeline.