It’s 2021, and you want to know if your tradelines are legal. What does this mean? In the United States, a tradeline is a credit account that reflects on your credit report. Tradelines are revolving accounts or installment loans like credit cards. A tradeline will show up on your credit report as “Yes” or “No.” If it shows up as “Yes,” then it’s considered active; if it doesn’t show up at all, then you’re not obligated to repay it.
In the following sections of this blog post, we will talk about what tradelines are all about. We will discuss its purpose, benefits, consequences, and most all if tradelines are legal in 2021. This will give you a better understanding of the industry and why you should consider buying or selling a tradeline today.
What Are Tradelines?
Tradeline is a term used to refer to a line of trade extended by the primary credit card account holder to another person. It also refers to accounts appearing on your credit report. Tradelines on credit reports include information about the creditor. It also includes information about their past and present debt.
A tradeline will show up on your credit report under both active accounts (if there have been recent payments) and inactive accounts, which means they are not legally obligated to repay.
What Is An Authorized User Tradeline?
In most cases, a primary cardholder can extend credit lines to one or more people. We refer to the ones who are on the line of credit as authorized users. By becoming authorized user trade lines, you could improve your chances of getting approved for loans. That is regardless if you do not have a secured credit card from a credit card company or a bank account.
The important thing to remember about this type of tradeline is that the owner will remain responsible for repaying any debt incurred on it. While being an authorized user may help improve your credit score by raising your average age or payment history, there are some risks involved with having someone else’s personal finances mixed up in yours as well.
It is a must to know that as an authorized user, you are not committing bank fraud. But, it is also vital to be mindful and only transact with legal tradeline companies to avoid any problem. If you have a family or friend who is a primary account holder and is willing to add you to their lines of credit, then that should be a better option.
What Are The Benefits of Using Tradelines?
Using tradelines come with several benefits, including:
- Better Credit Scores: To have a good credit score, you must have a good credit history. But, if you have a struggling credit or have no credit history at all, buying tradelines is a way to help boost your credit score. In most cases, buying a single tradeline can help increase your credit score by 40 to 45 points.
- Positive Credit Report by Credit Bureaus: Credit reporting agencies are the ones maintaining your credit reports. They do not calculate your credit scores. It is important to remember that lenders base credit scores on your credit reports. When your report looks good, you are more likely to receive a high credit score from lenders.
- Increased Chances of Getting Credit Card or Loan Approval: With bad credit, you will most likely lose your chance of having your own credit card account or getting approval for a loan. But, if you buy tradelines wisely from a trusted tradeline company, your credit report will change. Thus, giving the credit card issuer or lender a reason to approve your application.
- Lowers Loan Interest Rates: Tradelines help improves your credit score. Meanwhile, people with impressive credit scores enjoy lower interest rates for loans.
- Higher Credit Limit: You can buy tradelines if you want a higher credit limit. With a high credit limit, you can have more to pay off more purchases.
What Are The Consequences of Using Tradelines?
The primary benefit of using tradelines is having your credit scores benefit from the payment history of the primary user. If the primary users begin missing their payments, it can negatively affect their scores and yours. Your scores are predicated on the continual perfect payment history and low balances of the tradelines. Without the proper consultation, the use of tradelines can be expensive and risky. Having a tradeline won’t always boost your score, so it’s necessary to consult an expert to determine the best path forward. (Contact us today to speak to one of our tradeline experts!)
Are Tradelines Legal In 2021?
In 2008 the Fair Isaac Corporation (creators of the FICO score) tried to exclude the use of seasoned tradelines as part of the FICO score. They were able to bring the case all the way up to Congress, wherein the result was that the use of seasoned tradelines would continue to factor in FICO scores. The main reason that the Fair Isaac Corporation had to reverse their stance on the issue was because of the Equal Credit Opportunity Act of 1974, specifically Regulation B of the document.
The act prohibits the FICO score from discriminating based on sex, gender, religion, and, most importantly, marital status. This allows tradelines to be legal because FICO and many other financial institutions do not check for marital status or any other type of demographic. Thus, they have no way of knowing if an authorized user of the primary tradeline is a spouse or not, resulting in all authorized users being considered for seasoned tradelines.
The conclusion is that tradelines are not illegal, as former FTC spokesman Frank Dorman said,” What I’ve gathered from attorneys here is that it is legal, however, the agency is not saying that it is legal technically.” Two years later the Federal Reserve Board conducted a study on how the seasoned tradelines affect the credit industry. From their studies, they concluded that clients with small credit reports would greatly benefit from tradelines. But, they had no type of effect on the industry.
Although tradelines have been a federal practice under regulation, there are still corporations that can violate the Credit Repair Organizations Act of 1996. This act states that it is illegal to use misleading information and requires all disclosures when offering “credit repair services.”
How Popular Are Tradelines In 2021?
Source: https://data.oecd.org/leadind/composite-leading-indicator-cli.htm#indicator-chart
After 2010 there has been a resurgence of the use of tradelines. The blue line represents the use of tradelines from 2004 until the present. As you can see, it has been a constant flow over the years. With the rise of market interest rates and eroding purchasing power, consumers turn to tradelines to quickly boost their scores and secure additional credit. Additionally, the increase in consumer confidence in the markets since 2010 has positively impacted the tradeline industry, as more and more consumers look for effective and efficient ways to improve their credit scores. Since we launched in 2010, we have helped thousands of clients rebuild their credit, helping them secure credit cards for themselves and access the funding they wouldn’t have qualified for before.
Do Tradelines Still Help Boost Credit Score In 2021?
As of 2017, it has been concluded in studies by the Consumer Financial Protection Bureau that 25% of consumers that get credit usually kick start their credit history through means of piggybacking or the use of tradelines, usually from family or friends. Although the creators of the FICO score wanted to ban it, they were UNSUCCESSFUL. This means the latest FICO score (FICO 8), which encapsulates the use of tradeline in its scoring models, is still widely used. Mortgage companies, auto lenders, and credit card companies continue to use FICO 8 to determine a prospective applicant’s creditworthiness. There may still be a possibility that FICO would exclude the scoring of tradelines in the future, but such a change would likely take years before industry and the marketplace adopt the model. Even today, many borrowers still use scores based on previous FICO 2, 3, and 4 scoring models. Thus, we believe that tradelines will continue to be a popular practice among banks and companies for many years to come.
What Credit Score Boosting Tricks Are Available But Illegal In 2021?
Although there are claims too many techniques on how to repair a credit score, many end up being fraudulent. Many of these dishonest companies promise quick ways to boost your score sometimes “instantly”, but there are practices that you need to avoid. For example, it is illegal to buy or sell seasoned primary tradelines.
Seasoned primary tradelines are credit lines that have been with an individual years ago, and for a price, companies can transfer the credit line over to another person. If you did not pay off the card or loan throughout the years, it is illegal for you to be the sole primary owner of the tradeline. You can be the authorized user but not the primary user. Next, there is disputing accurate debts when the consumer calls the credit reporting agencies and tries to dispute their debts.
Although this is an illegal technique, there are some instances when consumers have debts on their reports that don’t belong to them. In which case, we recommend opening a dispute. Finally, some individuals change their SSNs by applying for an EIN, hoping for a clean slate with no debt. There are many risks in this method, and our recommendation is always to improve your SSN file. It may need more resources and time but will reap long-term benefits.
What Is Coast Tradelines?
Coast Tradelines is a tradeline broker located in the United States. We are a leading fintech platform exclusive to the tradelines industry that helps people with bad credit have a better credit history. As a third-party services provider, we provide tradeline options that could help turn bad credit scores into good ones. As you know, a good credit score means better chances of getting a credit card or loan approval. Our company serves both individuals and businesses who want to become authorized tradelines.
Why Choose Coast Tradelines?
The tradeline industry is a growing industry. Tradeline companies emerge here and there. But, what makes Coast Tradelines the right choice? We share the major reasons why below:
A Certified Tradeline Expert
Our company is consists of people with the proper knowledge and skills for the job. We have years of experience in the tradeline industry. With us, you can be confident that your money is safe with us, and that all transactions are legit.
Reputable Tradeline Company
We are one of the most reputable tradeline companies in the country. We work with companies and individuals in the USA who either buy or sell tradelines or both. Rest assured all transactions made with our company are legal.
A Wide Variety of Tradelines and Tradeline Packages
We offer a wide selection of tradelines and tradeline packages to choose from. With our inventory, we are sure you’ll find the right one based on your needs. It is important to know that each tradeline varies in price. Having a good selection will help you choose based on your budget as well.
Free Financial Advice
Getting into tradelines may be too new for some. Others may find it too overwhelming. That is why we offer free financial consultations and give out free advice. This is to help you understand what the industry is about as you start your tradeline journey.
Final Thoughts on Legality of Tradelines in 2021
So, are tradelines legal in 2021? The answer to this question is a resounding yes! As long as you make payments on time and don’t exceed what is legally allowed, you’ll be fine.
Now, if you want to know more about the tradeline industry or about what we do and offer at Coast Tradelines, shoot us an email at [email protected]. You may also book a call with our tradeline expert HERE. Contact us today to help assess your file and recommend a few tradelines that’ll work for you.
