Buying Tradelines: All You Need to Know

husband and wife speaking with financial advisor to talk about buying tradelines

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Buying Tradelines: All You Need to Know

Your credit score is like a financial key. A good credit score can open doors to a lot of opportunities. However, when it is bad, you may find yourself unable to enjoy certain financial opportunities. Your credit score impacts whether you’ll qualify for a home or auto loan and at what rate. It also determines whether you’ll qualify for a credit card and other essential financial opportunities. If you have a bad credit score, it makes a lot of sense to take steps to boost it. One common way to boost your credit score is by buying an authorized user tradeline. If you have heard about buying an authorized user tradeline and wish to learn more, you have come to the right place.

What is a Tradeline?

A tradeline is a solid financial account that shows up on the user’s credit report. Usually, people who have a bad credit score may ask family members or friends with good credit scores to add them as an authorized user on their credit card account. This way, the person’s credit score taps into the strength of the other party’s healthy credit history, low utilization rate, and on-time payments.

If people are unable to get family members who can do this for them, they may resort to buying a tradeline. Buying a tradeline means that they are paying to have themselves listed as an authorized user on another person’s credit card account. The major differences between asking a family member and buying a tradeline is that;

  • You do not know whose credit card account you are being added to as an authorized user.
  • You pay money to access this service.

Buying tradelines is a business model that is regulated by some companies. The buyer and seller are handled by a third party who coordinates the process for a fee. Depending on the credit score that needs to be boosted, fees may be in the thousands of dollars threshold. Note that the tradeline will only appear on your credit report for a short period. While you are listed as an authorized user on the account, you won’t have access to the account’s line of credit. Instead, you can only benefit from their good credit score to boost yours.

Is Buying Tradelines Legal?

Buying tradelines is not an illegal activity; however, it isn’t legal either. The practice may be frowned upon because it is a shortcut to boosting credit score and may be seen as deception from the lender’s perspective. Lenders often request a copy of the applicant’s credit score to determine their loan outcome. By buying tradelines, the borrower would have successfully inflated their low credit score, thus deceiving the lender that they are financially disciplined and worthy.

Are There Any Actions Against Buying Tradelines?

Recent news suggests that there may be a crackdown on the purchase of tradelines. It appears the federal government has directed its investigative beam in this area and is closely monitoring the purchase and sale of tradelines. myFICO, in a new credit scoring model, has reduced the impact of buying tradelines. This means that people may not get the fast and desired result from buying tradelines in the future.

To further enforce the crackdown, many privacy policy updates now contain prohibitions that stop cardholders from selling access to their credit card accounts. Credit cardholders also stand a chance of losing access to their accounts if found in violation of the issuer’s terms. Added to this, a recent case between the Federal Trade Commission and BoostMyScore (BMS), a credit repair company, could also set the terms for tradeline companies in years to come.

Does Buying Tradelines Improve your Credit Score?

If tradelines were to be legalized, it might have a little effect on the credit score of the buyer. Theoretically, tradelines improve the buyer’s credit score using three factors.

Payment History

A tradeline buyer can continue to enjoy the influence of on-time payment history as long as the primary user continues to pay their bills. However, the tradeline buyer’s account will be negatively affected if the primary account user fails to pay on time or skip multiple payments.

Amounts Owed

Tradeline purchase is essentially leveraging the good financial reputation of the primary user. By leveraging the primary user’s account information, the tradeline buyer may lower their credit utilization ratio. A credit utilization ratio is the amount of available credit being used.

For context, if a person has a credit card limit of $1,000 and a balance of $800, such person’s credit utilization ratio is pegged at 90 percent. If the person purchases a $2,000 tradeline, the account will now have a total credit limit of $3,000, and with an $800 balance, the credit utilization ratio will now be 27%. The new 27% credit utilization ratio is desirable because many credit experts recommend keeping the ratio below 30%.

Length of Credit History

In general, the longer a person has been using credit, the better their credit score. This means that people who are new to credit may not offer much benefit to tradeline renters. However, tradelines from accounts that have been open and active for over a decade can boost the age of the buyer’s account.

What’s the Catch?

With tradelines, you need to know that the results are not permanent. The benefits of tradelines exist only as long as you are listed as an authorized user. Once the buyer has been removed, they return to their old credit score. Added to this, buying tradelines exposes buyers to the risk of cybercrime and identity thefts. Before you are added to another person’s credit card account, you’ll be required to provide sensitive information like name, addresses, social security number, date of birth, and others. This information can be used to steal your identity easily, thus leaving you to face more financial woes.

Other ways to boost your credit score:

  • Ask family members and trusted relatives to add you as an authorized user.
  • Take a credit builder loan.
  • Choose a secured credit card.

You can boost your credit score using a range of solutions; visit https://coasttradelines.com/ to find out.

CoastTradelines

10531 4S Commons Dr #544 

San Diego CA 92127

(619) 363-1472

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