Purchasing tradelines is a relatively common practice for those looking to get a boost to their credit score. That’s because when you purchase a tradeline, you’re added as an authorized user for the account. The benefits of that account, such as its age or credit utilization, then impact your credit score, potentially driving it up.
While these potential benefits may improve your credit score, purchasing too many tradelines could put you at some risk. To better understand your tradeline limit, it’s important to understand the reasons for your purchase and how these tradelines reflect on your credit report.
Is There a Tradeline Limit?
There are two critical answers here. The first: There’s technically no limit as to how many tradelines you purchase. The second answer is you may actually harm your credit score by adding too many. Of course, if you end up lowering your credit score, you’ll have paid money you could likely use elsewhere, such as to pay down debt, while receiving worse consequences than if you continued to pay your monthly bills on time.
What Are The Harms From Adding Too Many Tradelines?
There comes a time when adding more tradelines to your credit report will lead to diminishing returns. As tradelines aren’t always inexpensive, this means you’re throwing away more money to receive worsening results.
Beyond the loss of money, though, you may also experience issues with your credit report if you purchase too many tradelines. For instance, underwriters at the financial institution reviewing your credit report may flag your account for abuse of authorized user tradelines. When this occurs, the financial institution will, at the very least, refuse to take into consideration all accounts on which you are listed as an authorized user. In many cases, this will result in the underwriters denying your loan or credit application. As recent credit applications themselves can affect your score, you’ll likely see a lowered credit score once the process is completed.
Banks and financial institutions take credit reports very seriously. Per Experian, one of the leading credit agencies, you may open yourself up to charges of bank fraud by purchasing too many tradelines. This is because a credit report is supposed to represent your true and honest creditworthiness. If you’re taking advantage of the positives that come along with purchasing a tradeline without also engaging in the good behaviors that lead to a higher credit score, financial institutions may conclude that you’re falsely representing yourself.
What’s the Ideal Number of New Tradelines?
While there is no specific idea number of purchased tradelines, there are some rules of thumb that may help. Anecdotal evidence shows that many banks will flag a credit report that has more than three tradelines. Having more than three authorized user tradelines may cause your financial institution to discount the impact of all authorized user tradelines, purchased or not.
Generally, there may be times when it may benefit you to purchase only a single tradeline:
- You lack the funds to purchase additional tradelines.
- You’re looking for a higher credit limit.
- You’re only looking for a modest boost to your credit score.
- Your credit report already contains 15 or more tradelines.
- Your goal is to increase the age of your oldest account.
However, there also may be times where you feel it’s necessary to purchase two or three tradelines:
- You carry a thin credit file with few or no accounts.
- You need an improvement to your credit score due to a time-sensitive event.
- You want to maximize the boost to your credit score.
- You’re attempting to rebalance your credit history due to derogatory accounts
- You’re looking to improve your credit score at a specific credit bureau.
If you’re unsure how many tradelines to purchase, you should take the time to know what goes into a good credit score. By comparing your own report to the factors that go into a good, or even perfect, credit score, you can easily identify where you may fall short.
What Should You Do If You’ve Hit Your Tradeline Limit?
If you’ve already purchased three tradelines and still aren’t seeing the results you’d like, it’s time to examine your own financial behavior and see where it can be improved. For instance, if you have the funds to purchase a fourth tradeline, that money may be better spent paying off some of your current debt even if it doesn’t completely zero it out.
If you haven’t already, you should create a budget and see where you have the opportunity to reduce spending. This can free up funds that can go towards reducing your credit utilization or help you realize that another loan or line of credit isn’t needed.
Coast Tradelines Is Here To Help
At Coast Tradelines, we can work with you to identify whether purchased tradelines may help improve your credit score. Fill out our online tradeline assessment to see whether a purchase tradeline is right for you!