• What happens after you buy a tradeline?
• How do tradelines work?
• Are the effects of adding a tradeline permanent?

All of these are good questions you should know the answers to before purchasing a seasoned, authorized tradeline—so you can make the most of how tradelines boost credit scores. You also want to know this to avoid potentially hurting your credit: not knowing you are adding a risky account that can damage your credit can be a setback that defeats the entire purpose.

Knowing about tradelines before purchasing can save you some hard-earned money and time! Plus, using a purchased tradeline may not necessarily be as advantageous to your credit as becoming an authorized user on a friend or family member's existing account.

What Is a Tradeline, and How Does It Work?

• A tradeline is a line of credit that appears on your credit report. When you 'purchase' tradelines, you're paying for access to someone else's credit line.
• Don't buy into these blindly: if you choose to go this route, you will want to know the name of the account, the address, and contact information for the lender, and the account number.
• Confirm that when you are added to the tradeline that you are just listed as an authorized user. If you are added to the account as a cosigner or joint account, you accept responsibility for the payments.
• Purchased tradelines are typically viewed as a short-term boost to your credit: it's not a solution that will help you develop good credit habits long term.

When you purchase an authorized-user tradeline, the credit history of that tradeline is added to your credit report. It includes how long that particular account has been open and whether the account holder has been making payments on time. Your reported credit limit will increase slightly as well, which lowers your total credit utilization.

While you get the benefits of someone’s perfect credit behavior added to your credit report, you also don’t have the burden of having to maintain the tradeline yourself. However, this may not benefit you in the long run because it won't build the kind of sustainable credit habits you need to get ahead in life.

• Try to do everything else you possibly can to make sure that your score is almost at where you want it, and know that taking this route to try and repair your credit may not increase your score that significantly.
• Your results all depend on the type of tradeline you purchase. It's also worth noting that trying to purchase tradelines without the right guidance or insight can put you at risk of falling for a scam.
• You want to make sure whatever tradeline you get added to has a large credit line but little utilization to decrease your own credit utilization (this accounts for at least 30% of your score).

How to Add Tradelines Safely

There are companies in Dallas that sell tradelines for a fee. However, if it's possible, the best thing to do is reach out to friends and family members to see what kind of deal you can work out with them.

The second option is not only more ideal from a cost standpoint (some of these 'purchased' tradelines can end up costing you thousands). Plus, you actually know who is adding you to be an authorized person on their account. The flip side to this is that you need to consider:

• How long they have had the account
• What their credit utilization ratio is
• How much their line of credit is for
• Whether they are actually making on-time payments.

Another benefit of this method is that you can also help them pay down some of their debt. This directly lifts a family member or friend out of a potentially-damaging scenario for their own credit versus paying your hard-earned cash towards an unknown third party.

What Happens When You Purchase a Tradeline?

If you decide to go this route, after you purchase the right tradeline, you will notice that these tradelines boost credit scores for a little while. It usually takes about a month to see the effects because the tradeline information needs time to report to the credit bureaus.

• Credit cards typically only report to the credit bureaus once per month, but some cards (such as store cards) submit their data more frequently.
• The next reporting cycle for that tradeline will add the tradeline to your credit report (which is what gives you that temporary boost)!
• You do want to make sure that you carefully monitor your credit report for the next few months following the use of these strategies to ensure there are not any inaccuracies—and for when the tradeline falls off.

You want to make sure you are getting the right results for what you paid for!

'How Many Tradelines Do I Really Need?'

Depending on what each particular tradeline is offering—plus where your own credit stands—the answer to this question depends on a variety of factors. This includes how much each tradeline costs for the amount of time you are added on it, as well as what each account limit and credit utilization ratio is.

Knowing where your credit score is beforehand as well as what your debts are can really help you determine how many tradelines you need, and it depends on what tradeline is being offered to you. If you are renting, sometimes you can even add your monthly rent payments onto a tradeline. Just ensure that you are always paying your rent on time.

With that being said, not all accounts that are in good standing are always reported. For example, if you were on a joint account with someone or became a cosigner, if that account is in good standing or paid off, you may want to make sure it is on your report. If it's not, then you can call them to request that they do report your good credit behaviors!

How Long Do the Effects of Purchasing a Tradeline Last?

Your credit score is something that evolves primarily based on the age of the items on your credit report. When you miss a payment, there is an immediate impact on your credit score, but that impact lessens over time as more data is added to your credit report.

The reverse is true as well when a tradeline is added to your credit report: Your credit score will get an immediate boost that will diminish over time. Usually, when you purchase an authorized user tradeline, you are added to the tradeline only for a few months. You want to make sure that you carefully read the tradeline agreement and plan accordingly.

• When purchasing tradelines, understanding timing helps you get the most from your investment.
• If you are about to make a big purchase, tradelines should be secured about a month before you are ready to move forward.
• This helps you maximize the initial boost to your credit at a time that is the most opportune for your goals.
• However, be aware that this strategy is somewhat risky—and can present a misleading financial picture of yourself to potential lenders.

It's About More Than Learning How to Add Tradelines

A tradeline can be a greatly beneficial option as a quick, short term solution when you are working on a specific timeline with a big purchase. However, if you have more time to truly tackle credit repair, then a tradeline is not the best solution for good credit long term.

With the right planning, tradelines can definitely be a beneficial option when you have everything else lined up and just need a quick increase to get a better approval rate (and sometimes even a better interest rate). Understanding how to use a tradeline in your credit report is not the end-all-be-all as a credit repair solution, Dallas.

To start building better habits now that lead to long-term credit health, you need to know more than whether or not tradelines boost credit scores! 

Get in touch with your Credit Divas here at Credit Diva of Dallas to see how we can help you build lasting change and better credit the smart way!