How Do You Get A Tradeline?
A tradeline automatically creates when a customer starts a new line of credit with a lender. A new line of credit can be a new credit card from credit card companies. The new credit card's purchases and repayments create a record of history that appears in the credit report of the customer.
The customer can also get a tradeline by asking a family member, like a parent or a spouse, to add the customer's name as an authorized user (AU) to one of their credit card accounts. A credit card account that maintains good credit standing, together with the customer as AU, can help the customer improve credit scores over time. A positive credit history from the primary cardholder can benefit the AU's credit profile.
Credit bureaus also offer ways for customers to add tradelines like Experian Boost offers. Experian Boost represents a free tool that allows a customer to connect the bank accounts used for paying bills monthly. Bills like phone, utility bills, and internet streaming bills like Netflix, Hulu, Disney+, and HBO create a positive payment history when paid on time. Positive payment history can result in a boost to the customer's FICO® score through credit-building activities.
Another way of getting a tradeline comes through rent reporting services that are available to renters. Rent reporting services allow a customer to use rent payments as a tradeline to the credit report each month. A credit report that reflects good rental payment information can help boost the credit score of the customer. The customer must choose a rent reporting service that reports to all the three major credit reporting agencies to maximize impact on credit scores.
Buying or renting tradelines, also known as credit piggybacking or seasoned tradelines, represents another way to get a tradeline for building credit. This way allows a customer to pay someone to add the customer as an AU on established credit accounts. According to Nasdaq, there are several problems with buying tradelines that customers should consider:
The customer credit scores might not improve due to several reasons like the following:
- Some credit card issuers do not report AU activity to credit bureaus regularly
- The credit card company closes the account because of violations of terms
- The primary account holder could handle the account poorly with late payments
- The new tradeline might not benefit the customer, unlike other credit-building methods
- The card account holder could remove the customer as AU without notice
- Credit score creators could now detect seasoned tradelines and ignore them
Buying tradelines can be expensive as payments for an AU range from $150 to $4000 based on the following factors:
- The age of the account showing long-term history
- The amount of credit limit available on the account
Credit piggybacking represents a gray area for government agencies like the Federal Trade Commission (FTC), lenders, credit reporting agencies, and credit score creators who evaluate fraud risks.
How long do Tradelines last?
Tradelines last for seven years on credit reports, according to the CFPB guidelines. CFPB states that consumer reporting agencies are required by law that after seven years, a customer's account should be removed from most negative information that appears. Negative information or any information that is older than seven years must be disputed by the customer to the consumer reporting agencies to remove it.
Consumer reporting agencies are not required to delete information regarding bankruptcies for ten years under current laws. Other information like civil suits, civil judgments, and records of arrests can stay beyond seven years or until the governing statute of limitations has expired, whichever is longer. Positive information on a customer's account could remain on the credit report for up to 10 years to show good credit history.
Tradelines for fraudulent or incorrect reports can be disputed by the customer who finds errors. The customer needs to provide valid proof to the credit reporting agencies to support the dispute. The credit reporting agencies review the dispute and will remove the tradelines after 30 days if evidence supports the claim.
For more information on Tradelines and credit repair services, contact the professionals at iSoftpull today for expert guidance.
