A tradeline is simply a term used to describe a credit account found on a credit report. Tradelines are always visible on the credit report in the form of loans, credit cards and mortgages. They are used for generating credit scores. Here is more information about tradelines and their presence in your credit reports.
What is a Tradeline on a Credit Report?
A tradeline on your credit is a record of your credit activities used by the three major credit bureaus to describe your credit account. Examples of information on a tradeline are total amount of loans, number of credit accounts, payment history, total credit used, etc.
If you have more than one credit account, the accounts tend to have different tradelines. However, best practice is to try not to have too many tradelines, which can negatively impact your credit score.
The primary purpose of the tradeline is to calculate your credit scores. If you maintain a low credit balance, pay your bills and repay debts consistently, your tradelines can be positive. Your reward is great credit scores.
There is other information a tradeline contains, including:
- Name of lender and borrower
- Type of credit
- Payment status
- Account milestones such as payment history, credit limit, etc.
- Missed or overdue payments.
Note that the better your credit score, the better the tradeline reporting.
2 Types of Credit Tradelines
1. Revolving Tradeline
Revolving tradeline is a credit card account that allows you to use credit as long as you want. However, a credit limit or timeframe cannot be exceeded. An example of this is a credit card.
2. Installment Tradeline
Installment tradeline is in the form of a loan given out to be paid back by installations. Examples are mortgages and student loans.
How Can a Tradeline Impact Your Credit Scores?
Your credit score is required to process credit for you. Therefore, lenders need your tradeline to generate your credit scores. Your credit scores are calculated using a certain percentage of your payment history, length of credit history, credit type, amount of credit use and available credit.
The Benefits of Adding Tradeline to Your Credit Report
- Good credit score that can lead to quick approval of credit
- Lenders tend to approve loans for you at a lower-interest rate
- Better insurance rates
How To Add Tradelines to Your Credit Report?
If you are interested in adding tradelines to your credit report, you can do that by following these steps.
- Your family member might add you as an authorized user to one or more of their credit card accounts.
- Utility providers may allow you to add your bill payments as tradelines to your credit reports.
- All major credit bureaus can assist in adding tradelines to help positively impact your credit score.
3 Ways To Remove Tradelines
1. Closing of Credit Account
Tradelines are removed if you decide to stop using your credit account. However, after closing it, the tradeline on your credit report doesn’t delete until after a duration of up to 10 years.
2. Fraud
If fraudulent activities occur or you discover them on your account, you can request to have your tradeline deleted. This can have a positive impact on credit scores.
3. Removal From Account
As an authorized credit card user, if you are removed from using the account or lose access to the account, the tradelines are bound to be removed from your credit report. The tradeline can be deleted after about two months of removal.
Note that it is crucial that you monitor your credit reports and scores closely and frequently. This helps allow you to detect fraudulent activities, certain mistakes or inaccurate information in a timely manner.
Bottom Line on Credit Tradelines
Tradelines are used to positively impact credit scores. They contain the necessary information that is later calculated to determine your eligibility for credit. You can get tradelines added by the three major credit bureaus, rent reporting services, service providers or family members.
Tradelines are removable if fraud is detected, if you close your credit account or are removed from an account. A credit monitoring service can help to catch fraud before they escalate.
