Why You Should Avoid Buying Tradelines - Experian (2024)

Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.

In this article:

  • How Buying Tradelines Works
  • Is It Illegal to Buy Tradelines?
  • What's the Difference Between Buying Tradelines and Becoming an Authorized User?
  • Alternative Ways to Improve Your Credit Score Fast

Buying a tradeline is one way to improve your credit score, but it can be costly, and you could be putting yourself at risk of identity theft. What's more, lenders consider the practice to be deceptive.

As a result, buying tradelines isn't advised, and there are better ways to build your credit. Here's what you need to know about the practice and the risks involved.

How Buying Tradelines Works

A tradeline is another name for a credit account that shows up on your credit reports. Each loan and credit card has a separate tradeline that includes various information about the creditor and the account.

Buying a tradeline involves paying someone to add you to one of their credit accounts, typically as an authorized user on a credit card. Because many credit card companies report account activity to the credit reporting agencies (Experian, TransUnion and Equifax) for both the primary cardholder and authorized users, their positive account history can potentially help improve your credit.

Tradeline companies act as intermediaries, connecting buyers and sellers for an additional fee. Depending on the account's credit limit and age, the cost can range from a few hundred dollars to upwards of $1,000.

You'll also need to provide a copy of your driver's license and your Social Security number. Once you've completed the process, you'll be added to the seller's tradeline for a couple of months, after which you'll be removed. The account will remain on your credit report as "closed" and can remain on your report for up to seven years.

Is It Illegal to Buy Tradelines?

There is no law against buying tradelines to improve your credit. However, buying tradelines may be viewed as deceptive by lenders and credit reporting agencies and could even put you in danger of committing bank fraud.

Credit scores are designed to help lenders determine a borrower's creditworthiness, and most use your credit scores and credit reports to determine whether to approve a credit application and what terms you qualify for.

If you pay money to improve your credit scores without doing any of the work or even getting a card to use, you could be falsely representing your creditworthiness to potential lenders.

What's the Difference Between Buying Tradelines and Becoming an Authorized User?

When you buy a tradeline, you're technically becoming an authorized user on another person's credit card account. However, unlike the traditional authorized user process, you don't know the person who's adding you to their account, and you're paying for the service.

With a traditional authorized-user scenario—which is acceptable and even encouraged by credit card companies and credit bureaus—a family member or friend adds you to their credit card account.

In this situation, you don't have to pay the primary account holder, and you'll typically get a card linked to the account that you can use (with the primary cardholder's approval) to develop good credit habits.

Buying tradelines will do nothing to help you build good credit habits because you won't have access to the account. And, if you buy a tradeline from an individual rather than through a service, which can protect your personal information, you may be at risk of becoming a victim of identity theft.

Alternative Ways to Improve Your Credit Score Fast

If your credit needs some work, buying a tradeline may seem like a quick fix. However, it won't have as much of a positive impact as some of the alternatives. Here are some other ways to improve your credit score fast.

Pay Down Credit Card Debt

Your credit utilization rate, calculated by dividing a credit card's balance by its credit limit, is a major factor in your credit score. If you have a high utilization rate, paying down your balance can help improve your credit score as soon as the account gets reported again to the credit reporting agencies.

There's no hard-and-fast rule for what your utilization rate should be—the lower, the better—but as you start paying down your balance, you may start seeing your credit score increase.

Dispute Credit Report Inaccuracies

If there are erroneous or fraudulent tradelines on your credit reports, they could bring down your credit score. Get a free copy of your report from each of the credit reporting agencies through AnnualCreditReport.com and review them for potential problem accounts.

You can also monitor your FICO® Score and Experian credit report more regularly through Experian's free credit monitoring service.

If you find errors on your report, you have the right to dispute them directly with the credit reporting agency, as well as with the creditor. If the credit bureaus confirm your dispute and either remove or correct the information, your credit score will respond accordingly.

Sign Up for Experian Boost®ø

Historically, utilities, rent and streaming subscriptions haven't been included in your credit scores. But with Experian Boost, you can now get credit for making these regular monthly payments.

Once you register, you can link your financial accounts and allow Experian to identify your positive payment history. Then, you'll verify the data and confirm you want it included in your Experian credit file. Once you do so, your FICO® Score will be updated immediately, possibly resulting in a credit score boost.

Focus on Developing Good Credit Habits

There's no guarantee you'll get the benefits you're paying for when buying a tradeline, and there are ethical and potential legal issues to consider with the practice.

If your goal is to improve your credit score and keep it in good shape, the best way to do that is to develop and practice good credit habits. Make your payments on time every month, keep your credit card balances relatively low, pay them in full each month and avoid unnecessary debt.

As you establish a positive credit history over time, check your credit score regularly to track your progress. Focusing on good credit habits rather than quick fixes will give you a much better chance of maintaining it where you want it to be in the long run.

Why You Should Avoid Buying Tradelines - Experian (2024)

FAQs

Why You Should Avoid Buying Tradelines - Experian? ›

You're paying to be added to the account.

Can tradelines mess up your credit? ›

Even if you have a decent credit score, for instance, you could have difficulty getting a loan if a lender finds negative information, such as late or missed payments, in one or more of your tradelines.

Why are tradelines illegal? ›

Key Things to Know About Tradelines

Purchasing a tradeline could violate a credit card company's terms of service. Using tradelines to deceive lenders or creditors in order to qualify for financial products is illegal.

Is it safe to use Experian Boost? ›

Yes, Experian Boost is safe. Protecting customer data is Experian's top priority. Experian Boost uses multiple layers of security technology, including bank-level SSL security encryption, to safeguard your personal information when you connect your accounts and add your bills.

Will Experian hurt my credit? ›

Checking your own credit report or score won't affect your credit scores. It's an example of a soft inquiry—a request for credit info that does not affect credit scores. Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.

Is buying tradelines worth it? ›

Buying a tradeline is one way to improve your credit score, but it can be costly, and you could be putting yourself at risk of identity theft. What's more, lenders consider the practice to be deceptive. As a result, buying tradelines isn't advised, and there are better ways to build your credit.

Do tradelines boost FICO score? ›

Positive tradelines, with a good payment history and low credit utilization, can boost your credit score. In contrast, negative tradelines, with late payments or high debt levels, can have a negative impact. Now, let's delve deeper into the different types of tradelines.

What are the disadvantages of Experian? ›

The main disadvantage of Experian is that, unlike FICO, it is rarely used as a stand-alone tool to make credit decisions. Even lenders that review credit reports in detail rather than go off a borrower's numerical score often look at results from all three bureaus, not just Experian.

How can I raise my credit score 100 points in 30 days? ›

Steps you can take to raise your credit score quickly include:
  1. Lower your credit utilization rate.
  2. Ask for late payment forgiveness.
  3. Dispute inaccurate information on your credit reports.
  4. Add utility and phone payments to your credit report.
  5. Check and understand your credit score.
  6. The bottom line about building credit fast.

Do lenders look at Experian boost? ›

Experian Boost impacts multiple credit scoring models, so as long as your lender utilizes the most common versions of the FICO® Score and VantageScore®, they will see your boosted credit scores when they request your credit report from Experian.

Can Experian be trusted? ›

Credit scores from the three main bureaus (Experian, Equifax, and TransUnion) are considered accurate.

Why is Experian credit score so much higher? ›

Why is my Experian credit score different from FICO? The credit scores you see when you check a service like Experian may differ from the FICO scores a lender sees when checking your credit. That's because the lender may be using a FICO score based on data from a different credit bureau.

What are negative influences on Experian? ›

Multiple credit applications can negatively affect your score, regardless of whether they're successful. This is because each application records a hard search on your report. Try to only apply for credit you're eligible for. Missing payments.

How long does a tradeline stay on your credit report? ›

Tradelines stay on your credit reports as long as accounts are active. Closed accounts in good standing remain on your report for up to 10 years. Tradelines with negative history that are closed remain on credit reports for seven years.

How do you get a tradeline removed from your credit report? ›

If you were an authorized user and you've been removed from an account, the tradeline will be deleted from your credit report after about two months. Another scenario where you could request to have a tradeline removed is if fraud has occurred.

How many tradelines should I have on my credit report? ›

Derogatory accounts need to be outweighed by positive accounts, so one's credit report should contain at least 2-3 positive tradelines for every negative account. Therefore, multiple tradelines may be necessary to balance out derogatory accounts damaging one's credit.

Can trading affect your credit score? ›

Like other forms of investments, buying or selling stocks won't directly change your credit score, but they can indirectly affect it. However, there is an exception — margin accounts.

Top Articles
Latest Posts
Article information

Author: Jerrold Considine

Last Updated:

Views: 5301

Rating: 4.8 / 5 (78 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Jerrold Considine

Birthday: 1993-11-03

Address: Suite 447 3463 Marybelle Circles, New Marlin, AL 20765

Phone: +5816749283868

Job: Sales Executive

Hobby: Air sports, Sand art, Electronics, LARPing, Baseball, Book restoration, Puzzles

Introduction: My name is Jerrold Considine, I am a combative, cheerful, encouraging, happy, enthusiastic, funny, kind person who loves writing and wants to share my knowledge and understanding with you.