Improving credit scores with tradelines?
You may have heard the terms:
- “Piggybacking” credit.
- Seasoned tradelines.
- Authorized user tradelines.
- Tradelines for sale.
It’s a real thing; its is a powerful credit enhancement hack.
But, it’s important to be persuaded by facts and knowledge, not just by a potential increase in your credit scores.
For that reason, consider the following warning and recommendation:
- You could ruin your credit and/or get ripped off without understanding that industry.
- You should seriously read (or scan to get the point of) this article.
Two quick (important) definitions.
So, what are tradelines? It’s important to understand something.
Tradelines can mean “any account in your credit report” or it can mean “authorized user accounts you add to credit reports for the purpose of increasing credit scores.”
If you already have open credit, such as credit cards or car loans, your creditors report your payment behavior to the credit bureaus. This information goes on your credit report as an account. Each account is called a “tradeline”.
Also, if you search for companies that sell them, you can purchase authorized user accounts for the purpose of increasing your credit score.
How tradelines work.
In order to explain how tradelines work, we need to explain a tiny bit about credit and credit scores.
- Information in credit reports is either good or bad.
- That good or bad information in credit reports is evaluated by score modelers, like “Fair Issac Corporation.”
- More good stuff = high score.
- Less good stuff = lower score.
With that said, you might already see where this is going.
If you add tradelines to your credit report, they will impact your credit score. More specifically:
- If you add accounts with negative information (like missed payments), your score will go down.
- If you add accounts with positive information (like perfect payment history), your score will go up.
How do you add tradelines, at all?
There are primarily three ways to add tradelines.
- Apply and get approved for a line of credit (like a credit card, loan, etc.). Then, allow that account to age with perfect payment history, over time.
- Ask a friend or family member to add you to their credit card as an authorized user.
- Buy (or “rent”) a spot as an authorized user on someone else’s credit card through a company or tradeline broker.
Options 1 and 2 deserve a bit of attention because selecting appropriate lines is important.
However, option 3 requires the most attention, as there are many questions and problems that can arise in a tradeline transaction.
Tradelines for sale.
When you look to engage a company to purchase seasoned accounts, you think you’re “buying tradelines” but in reality, you’re “renting” them.
Because you’re not permanently buying anything. You’re paying to be added as an authorized user onto a pre-existing account, temporarily.
In other words:
- You’re not doing this to add a permant account that you have access to or that you can use for purchases.
- You’re doing this to increase your credit scores so that you can get approved for your own lines of credit.
That’s the nature of the service provided by tradeline companies. It’s really a form of credit repair or enhancement.
When buying tradelines, you have to be careful.
You’ll want to:
- Research your options.
- Consult trusted experts.
- Ensure promises are reduced to legally compliant contracts.
- Monitor credit reports for updates.
Most importantly, you’ll want to use a credit-services escrow platform to ensure you never get ripped off.
Cost, pricing and fees.
If you search the internet, you’ll see everything from tradeline lists to $100.00 tradelines to tradeline packages and more.
Over the last decade, the commercialization of the practice has seemed to solidify prices.
While fees for this service may range based on different factors, the average cost of piggybacking credit seems to be around $600.00 each.
That’s what you can expect to pay when you buy tradelines.
More important than the price is the quality of the company you choose.
It’s a pretty simple business model.
There are organizations that maintain a list of tradelines onto which you can pay to be added as an authorized user for the purpose of improving your credit score.
These are typically called tradeline sellers or brokers.
The person who owns the credit card gets a cut of the proceeds. The company keeps the rest as income. And, if they run the company well, there’s definitely a lot of room for profit.
The companies range in quality and significance. Here are a few categories we’ve observed:
- Keyword stuffers. These aren’t companies at all. They just blast out content to get your attention using words you search. They likely sell nothing at all or indirect products like “educational” programs.
- Website only. These aren’t companies, either. They may or may not become a company. Usually hackish websites indicates very little resources and preparedness.
- Gamil and a spreadsheet. Some “companies” just sling lists around with a free gmail account and a spreadsheet. They actually do sell, though.
- Wholesalers and Suppliers. This industry is already a middleman model. Some people try to jump in and become middlemen of middlemen by wholesaling tradelines of existing companies.
- Growing. After many years of figuring things out, some companies start to grow.
- Mature. After even more years of figuring things out, some companies mature and become responsible and worth of your time and money.
The effectiveness of tradelines.
Do tradelines really work? What gains in score should you expect? How fast do tradelines work?
This is an area most likely to cause conflict.
- Consumers expect more results than providers can provide.
- Providers disclose less information than consumers deserve.
Despite ill-defined benefits like “guaranteed tradelines” or refunds, buyers and sellers of tradeline services are almost never on the same page.
Unfortunately, the consumer needs to inform themselves so that they can understand what kind of expectations are reasonable (whether a company discloses them or not).
Here are two great resources:
- A study by the federal research board dedicated to the impact to credit scores by piggybacking authorized user tradelines.
- A huge tradeline study conducted by a large tradeline company showing before and after results based on varied scenarios.
Do not look to online reviews to determine whether tradelines work. Online reviews are often subject to manipulation. Even if they were honest, you may not experience the same results with tradelines as someone else.
Ask a lot of questions.
What does the law say about this industry?
In addition to concerning yourself with a company’s quality, the effectiveness of the tradelines themselves, you should also concern yourself with the law.
It’s very unlikely that tradelines are illegal for the end-user. Meaning, a person buying authorized user accounts is likely not breaking any laws.
(If anyone knows differently, please comment below).
The specific practice of piggybacking credit is not regulated. Instead, it falls under typical credit repair laws, such as the TSR and the CROA.
Even so, there are a lot of companies and very few of them comply with those laws and regulations.
It is certainly possible for the sellers of tradelines to violate the law (or rules), including:
- The Credit Repair Organizations Act (the “CROA”). This law prohibits up front fees, requires honesty, disclosures, and certain contract requirements, all of which are easy to violate if the company isn’t careful.
- State Laws. Most State laws mirror the CROA.
- The Telemarketing Sales Rule. This rule requires a 6 month delay in charging consumers. Compliance with this rule is extremly uncomon if not totally non-existent.
Aside from laws that directly impact the direct service of tradelines, people tend to couple an otherwise legal service with illegal services.
For example, it is common for people to engage in synthetic identity fraud in the form of so-called credit profile numbers (or “CPNs”). Then, they add authorized user accounts to the CPNs, dragging the tradeline industry down into outright fraudulent transactions.
Another example is “primary” tradelines. Buying primary accounts in the same way as an authorized user accounts would violate the Fair Credit Reporting Act. Why? Because that law requires accurate data reporting and buying primary tradelines cannot be accurate.
Are tradelines worth it?
That’s an easy one. The answer is a question: Will the tradelines help you achieve your goal? If so, then yes. If not, then no. Clearly, determining whether it will help depends on your research and the honesty and preparedness of the company you hire.
How long do tradelines take to report?
You could ask this question differently. You could ask “How fast do tradelines work?” This depends on a lot of factors, such as whether the company you’re working with is responsible. But, the general answer is that it takes about 30 days to report and post. As soon as this happens, you will have a new score.
How long does the boost from tradelines last?
This is a great question because there’s some confusion about how long tradelines stay on your credit report vs how long the positive impact on your credit score lasts. Tradelines may stay on your credit report for many years. However, the impact from adding them only lasts for a few months and continues to go back down over time.
Can tradelines help to buy X, Y, or Z?
This is the best question because if it doesn’t help you achieve your goal, what’s the point? Whether tradelines can help you secure a mortgage on a house, open a new credit card, obtain a car loan, etc., depends on more than tradelines. Yes, tradelines may help you get your credit score into qualifiable territory. But, getting approved for credit requires more than good credit scores. So, if you’re otherwise qualified (income, job, etc.), then this technique may be an option for you if need a quick boost in score.
Where should you buy tradelines?
We do not make any specific recommendation to buy tradelines or from whom you should buy them. However, if you plan on pursuing this credit improvement technique, we do recommend that you use Credzu’s escrow platform so that you can guarantee that you will not be ripped off. How? We hold your money in escrow and release it to the company only if they performed as agreed. Otherwise, the money goes back to you.