Can You Add Too Many Tradelines?

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Yes. When used correctly, purchased tradelines may boost your credit score. This is helpful when you’re right on the edge of being eligible for a needed loan. Naturally, people who are looking to make a significant impact on their credit score may think that if buying one tradeline is good, then buying several will be several times as good.  

However, that logic falters when exposed to reality. As purchasing a tradeline means you’re added as an authorized user to an account, many lenders and financial institutions become leery of lending to someone whose credit report includes too many authorized user accounts.  

Receiving Diminished Returns 

When you purchase a tradeline, you’re using money to add yourself as an authorized user to someone else’s credit card or line of credit. This is essential to understand because you’re looking to receive value for the money you spend. If you’re continually adding yourself to other people’s tradelines, you’ll end up spending more money than necessary to receive. Put simply, you’ll end up wasting your hard-earned money if you keep adding tradelines. 

To avoid diminishing returns, you should take time to understand why your credit in need of repair. Do you have a thin file or a short credit history? Is your utilization too high? Are you trying to balance to diminish the impact of a derogatory account?  

Asking yourself these questions can help you know what types of tradelines you need to buy and how they’ll impact your score. Adding yourself to several new tradelines won’t do anything to lengthen the age of your oldest account, and purchasing several tradelines when you already have a full file will also result in little impact on your overall credit score. 

The end goal of adding yourself as an authorized user to someone’s accounts should be a boost to your credit score. If you’re finding that each new tradeline is having little impact, you’ve likely reached the point of diminishing returns. 

Getting Flagged for Tradeline Abuse 

Beyond the lessened impact of each added tradeline, there comes a point when lenders or financial institutions will view your multiple authorized user accounts negatively. Lenders use your credit score and report to understand your creditworthiness. That is, your credit score is a measure of your risk to the lender. Higher scores mean less risk, as your history of receiving loans and paying them indicates the ability to continue doing so going forward. 

Banks and other financial institutions have to consider authorized users who are the spouse of the person otherwise named on the tradeline. Federal law requires them to do so. Due to this, many financial institutions also consider authorized user accounts even if the relationship between the two people isn’t spousal. 

However, lenders take your credit score and report seriously. If they notice numerous accounts where you are only the authorized user, they may see this as an attempt to boost your score without improving the underlying behaviors that indicate your creditworthiness. When this occurs, the lender won’t just ignore some of your authorized user accounts. They will instead ignore all of them.  

This means that all of the money you spent on adding yourself as an authorized user will be wasted. Even worse, some financial institutions may view this as fraud. This can put you in legal trouble and make it nearly impossible to receive a loan in the future. 

In terms of tradeline abuse, no hard and fast number differentiates legitimate use from fraud. Anecdotally, though, most experts say that having more than three authorized user accounts on your credit report will invite further scrutiny. 

Choosing the Ideal Number of Tradelines 

There are two different numbers to discuss here. As stated above, you should try to keep the number of authorized user tradelines on your credit report to three or fewer. This will make it less likely a financial institution will dismiss all authorized user tradelines when determining your creditworthiness. 

However, that still leaves you with some amount of guesswork to decide how many tradelines you need to purchase to help you specifically. All credit reports are unique. This means there is no hard-and-fast rule as to how many tradelines you need to purchase. 

Generally, though, if you have a thin file or need a tradeline to post quickly or to a specific credit bureau, you should consider purchasing two or three tradelines. If you’re dealing with budget issues or have a full credit report of at least 10 or more accounts, you should focus on purchasing a single, high-quality tradeline. 

Finding Help With Coast Tradelines 

If you’re struggling to improve your credit score, take our online tradeline assessment today. This will give us beneficial insights into the current state of your credit report and how our tradeline services may help. 

Furthermore, make sure to check out our blog. It covers topics like what goes into your credit score, how you can reduce debt, and why purchasing a tradeline may be beneficial to you.