One question we often hear is “Do tradelines still work in 2020?”
Fortunately, we can say with certainty that tradelines do still work in 2020, and we are confident they will continue to be effective for years to come.
To explain our answer, we will delve into the history of authorized user tradelines and the policies that regulate the tradeline industry.
Why Do Tradelines Work?
Although the term “tradeline” could refer to any account in your credit file, usually in our industry people use the word as shorthand for authorized user tradelines, or accounts on which you are an authorized user.
Credit card companies allow cardholders to add authorized users (AUs) to their accounts, which are people who are authorized to use the account but are not liable for any charges incurred. For example, a business owner could add an employee as an AU of their credit card, or a parent could add their child.
When someone is added as an AU, often the full history of the account is shown in the credit reports of both the primary user and the AU, regardless of when the AU was added to the account. Therefore, the AU may have years of credit history associated with the account reflected in their file as soon as they are added.
This is why obtaining an AU tradeline through a family member or friend is a common way for people to start establishing a credit history. In fact, studies estimate that 20-30% of Americans have at least one AU account.
Why are authorized users able to share the benefits of the primary user’s credit rating, even though they are not liable for the debt? This policy is a result of the Equal Credit Opportunity Act of 1974 (ECOA).
Before ECOA was passed, creditors would often report accounts shared by married couples as being only in the husband’s name. This prevented women from building up a credit history and credit score rating in their own names, which in turn prevented them from being able to obtain credit independent of their husbands.
In response to this unequal treatment, ECOA was passed to prohibit discrimination in lending. The federal law made it illegal for creditors to discriminate on the basis of sex, marital status, race, color, religion, national origin, age, or receipt of public assistance.
This means that creditors may not consider this information when deciding whether or not to grant credit to an applicant or determining the terms of the credit.
ECOA was passed in large part to prevent creditors from discriminating against women and to provide equal credit opportunities to women.
Regulation B is a section of ECOA that specifically requires that creditors report spousal AU accounts to the credit bureaus and consider them when lenders evaluate a consumer’s credit history.
Generally, creditors do not distinguish between AUs that are spouses and those that are not when reporting to the credit bureaus, which effectively requires the credit bureaus to treat all AU accounts in the same way.
As a result of this policy, the practice of “piggybacking credit” emerged as a common and acceptable way for individuals with good credit to help their spouses, children, and loved ones build credit or improve their credit.
The practice of piggybacking is the foundation of the tradeline industry. In a piggybacking arrangement, a consumer pays a fee to “rent” an authorized user position on someone else’s tradeline. The age and payment history of that tradeline then show up on the consumer’s credit report as an authorized user account.
Are Tradelines Legal?
It is understandable that there is some confusion about this since not many people are aware of the idea of tradelines for sale, although the practice has been in use for decades.
While Tradeline Supply Company, LLC cannot provide legal advice, we can refer to several official sources, including the Federal Trade Commission, who have indicated that it is legal to buy and sell tradelines.
While tradelines are not illegal, historically, they have not been accessible to everyone. The high cost of tradelines meant that only the wealthy could afford to purchase tradelines for credit piggybacking. Today, however, innovations in the industry have lowered the cost of tradelines, making them affordable to a much wider audience.
Tradeline Supply Company, LLC is proud to be leading the tradeline industry in automating the process of buying and selling tradelines, offering some of the lowest tradeline prices in the industry, educating consumers on the credit system, and making tradelines accessible to everyone.
Our goal is to provide equal opportunities to those who do not have access to authorized user tradelines through friends and family by providing an online platform that allows for a greater network of connections.
But Didn’t Credit Card Piggybacking Get Banned?
Fair Isaac Corporation (FICO), the creator of the widely used FICO credit score, did try to change its scoring model to eliminate the benefits of authorized user tradelines, although they were ultimately unsuccessful. The firm announced that they were planning to devise a way to allow “real” AUs to keep the benefits of their AU tradelines while at the same time discounting the value of AU tradelines for consumers who FICO deemed to be “gaming the system.”
FICO admitted to Congress that they could not legally discriminate between AUs based on marital status due to ECOA.
While this statement understandably caused a lot of concern among consumers of tradelines, as it turns out, FICO was never able to implement this change in their scoring system.
At a congressional hearing in 2008, Fair Isaac’s president admitted that they could not legally distinguish between spousal AUs and other users, because discriminating based on marital status would unlawfully violate ECOA.
After consulting with Congress and multiple federal agencies, FICO was blocked from discriminating against AU account holders. Consequently, all AU accounts are still being considered in FICO 8, the most widely used credit scoring model.
In addition, studies have shown that accounting for AU data helps make credit scoring models more accurate, so it is actually in FICO’s best interest to continue including all AU accounts in their credit scoring models.
In working with thousands of consumers over the years, our results prove that in 2020, AU tradelines still remain an effective way to add information to an individual’s credit report, regardless of the relationship between the primary user and the authorized user.
Here’s another piece of evidence that proves that authorized user tradelines still work in 2020: many banks actually promote the practice of becoming an authorized user for the specific purpose of boosting one’s credit score. To see this for yourself, all you need to do is go to any major bank’s website and search for “authorized user.” You are almost guaranteed to see several articles pop up that talk about becoming an authorized user in order to build a credit history.
How Do We Know Tradelines Will Continue to Work in the Future?
Most widely used credit scoring models still include authorized user “piggybacking” accounts.
Given that FICO has already targeted the tradeline industry before, it makes sense to wonder whether tradelines will still work in the years to come if FICO eventually does succeed in coming up with a way to discriminate against certain AUs.
Thankfully, we can rest assured in knowing that the tradeline business will be around for a long time. The reason that we can be sure of this is that the credit industry is extremely slow to adapt, so even if FICO were to roll out a new credit score model that can tell which AUs purchased their tradelines, it would take years, if not decades, for this new credit score to be adopted across the entire financial industry. Let us explain why this is the case.
Credit scoring is a complicated process, and all lenders have their own guidelines when it comes to underwriting. FICO has many different scoring models, and the specific versions used to evaluate credit applicants vary widely between different industries and even between individual lenders within the same industry.
Currently, the three major credit bureaus (Equifax, Experian, and TransUnion) use the version called FICO 8, which debuted in 2008. Consequently, this is also the version that most lenders use for measuring consumer risk for various types of credit, such as personal loans, student loans, and retail credit cards.
However, according to FICO, the mortgage industry still relies on the much older FICO score models 2, 4, and 5. Auto lenders sometimes use FICO 8, while many still use FICO 2, 4, and 5. Credit card companies may use versions 2, 3, 4, 5, and 8.
As if this isn’t complicated enough, many lenders also use proprietary credit-scoring guidelines specific to their businesses. As FICO’s website says, “It is up to each lender to determine which credit score they will use and what other financial information they will consider in their credit review process.”
As you can see from the wide range of versions used, lenders are extremely slow to adapt to changes in FICO’s credit scoring model. In addition, their underwriting processes have been built around previous versions of FICO. All of the credit score data they have accumulated over time is only accurate for the particular version that was used to calculate it.
Transitioning to a completely new credit score model would require businesses to expend significant resources on updating their technological systems, collecting and analyzing new consumer data, training employees, and possibly incurring financial losses as a consequence of not being able to rely on the consumer data they collected while using older credit score models.
For these reasons, most lenders tend to be very reluctant to introduce the latest FICO credit scoring model.
Lenders use credit scoring models that are specific to their industries, so they tend to resist changing to newer models. Photo by InvestmentZen.
So, even if FICO were to successfully eliminate authorized user data in future credit scoring models, it is likely that it would take years or even decades for lenders to adapt to this change.
In addition, as the 2008 congressional hearing showed, FICO will face pushback from the federal government if they try to eliminate authorized user benefits again. It is highly unlikely that a large company like FICO would want to risk being shut down by the federal government for violating the law.
Consumers wouldn’t stand for it, either. In the Washington Post, J.W. Elphinstone wrote, “Other consumers besides credit renters stand to lose with the change, namely those for whom authorized user accounts were designed… there’s no way to distinguish these from the latest crop of strangers trying to augment their scores. Lenders who want to find out more information about others on credit card accounts are hindered by the Fair Credit Reporting Act and privacy laws.”
Final Thoughts
When FICO took the issue of piggybacking all the way up to Congress in 2008, they made headlines in their fight against the practice.
This was also during the same time that the subprime mortgage meltdown began which preceded the Great Recession. The entire mortgage industry had to be overhauled and many people assumed that the tradeline industry went down along with it.
What did not make headlines is that FICO’s push to do away with the authorized user tradeline industry actually failed due to the government upholding ECOA and the FTC affirming that the practice of buying and selling tradelines is allowed.
The banks themselves even promote credit card piggybacking among friends, family, and co-workers.
Use our list of common mistakes below to make sure you get the most out of your authorized user tradelines. Don’t make the same mistakes we’ve seen before!
1. Having fraud alerts or credit freezes on your account
If you have fraud alerts or credit freezes on your account, new tradelines simply will not post on your credit report.
Fraud alerts essentially freeze your account, so new information cannot be added. If you have fraud alerts on your credit file, you must contact each credit bureau directly to have the fraud alerts removed before you will be able to add new tradelines to your file.
2. Not knowing how tradelines work
The most important factor in purchasing tradelines, in our opinion, is to understand how tradelines work. Without this understanding, it is easy to let commissioned salespeople lead you astray and sell you tradelines that are not the best for your particular situation.
If you are new to tradelines, then be sure to check out our Tradelines 101 infographic for a crash course on the basics as well as the large library of educational articles in our Knowledge Center.
3. Not understanding how credit scores work
Before buying tradelines, it is vital to have a general understanding of how your credit score works. There are tons of useful resources online that can walk you through what factors affect your credit score, such as our guide to building credit with tradelines. Knowledge is power, and understanding how credit scores work is worth the investment since your credit score can affect everything from your finances to your job.
The power of a tradeline does not necessarily depend on its price tag.
4. Judging the power of a tradeline strictly by price
When buying tradelines, putting price first is not wise. It is easy to assume that the more expensive a tradeline is, the more powerful it is, but this is not always the case.
For example, someone with a very established credit profile might look at a $1,000 tradeline and just assume that it is the one they want. However, if that $1,000 tradeline does not significantly improve their current average age of accounts or lower their already low utilization ratios, it may not have very much of an effect, or it could even hurt their credit!
Simply adding more of what you already have is not necessarily an improvement. Our Tradeline Calculator is the perfect tool to calculate where your numbers currently stand and how they may be affected by new tradeline data. Make sure to only select tradelines that will actually help you.
5. Not realizing that the power of a tradeline is always going to be relative to what is in your credit report
The power of tradelines is always going to be relative to what is already in your credit file.
For example, if your average age of accounts is already 10 years old, an 8-year-old tradeline may not necessarily help you very much, since you are not improving that variable.
On the other hand, if someone’s average age of accounts is only 1.2 years old, an 8-year-old tradeline may be more powerful for that person. Tradelines do not affect people in the exact same way because everyone’s credit file is unique.
For more information on choosing the best tradelines for your particular situation and goals, our buyer’s guide to choosing a tradeline is a valuable resource.
6. Relying strictly on buying tradelines
It is not smart to rely only on purchasing authorized user tradelines when building or rebuilding credit. In general, tradelines that you can purchase are usually authorized user positions on credit cards, which are revolving accounts.
While this can be very powerful, almost all credit scoring models will take into account your total mix of credit, and it is more favorable to have a good mix of different kinds of credit accounts.
Some additional examples of different types of credit accounts may include auto loans, mortgage loans, installment loans, etc. Having a good mix of credit types is ideal. For more detailed information on how to optimize your credit mix, check out our article, “Credit Mix: Do You Need to Care About Types of Credit?“
In addition, if your credit report has delinquencies such as collections or late payments, tradelines may not solve your problems. You may need to consider repairing your credit before adding tradelines or in tandem with your tradeline strategy. [Disclosure: This article contains affiliate links.]
The age of a tradeline, also referred to as “seasoning,” is often even more important than its credit limit.
7. Valuing limit more than age
Many people initially focus only on how large of a credit limit a tradeline has. They often think that the tradeline with the largest credit limit is automatically the best tradeline.
For example, they might ask, “Should I get the $30,000 tradeline, or do you think the $20,000 one is enough?” However, this question is flawed from the start.
As a real-life example, it is not uncommon for someone to open a new credit card (possibly with a high limit) and that person’s credit score drops initially. Perhaps the reason the person’s score goes down is a new account has no payment history and may pose a higher risk in the eyes of the credit bureaus until a pattern of on-time payments is established. In this example, a new high-limit primary account actually made their credit score go down initially.
It could be the case that a tradeline with a $1,000 limit is actually the best for them because maybe that one has a lot of age and meets their strict budget. Everyone should consider the age and the limit together when buying tradelines and use the Tradeline Calculator as the first step in assessing your situation.
8. Buying cheap tradelines as a test
Some people will use the strategy of buying a cheap tradeline to see what that does first, and if it works a little, then they will buy a better one next time. We feel this strategy is a mistake.
For one, it ends up costing more in the long run, because now they have to buy two tradelines (one cheap one and one better quality one) when the person would probably be better off just getting one high-quality tradeline to begin with.
Also, buying that cheap tradeline may be working against the goal of improving the average age of accounts because in general, cheap tradelines do not have very much age. So when you add a tradeline with little to no age and then later add a tradeline with age, the first tradeline with little to no age ends up lowering the average age of accounts, thus making it more difficult to improve that average.
Calculating your average age of accounts is crucial when choosing the best tradelines for your credit file.
9. Not doing the math on the average age of accounts
You would be surprised to find how difficult it is to significantly change an average, especially when there are multiple accounts in the equation.
As an experiment, imagine there are 5 accounts that are all 2 years old so the average age of accounts is 2 years old. Now guess how old a new 6th account would have to be in order to make the average age of accounts be 5 years old. (Take some time to guess this answer.)
The answer: 20 years old! Seriously, do this math. 2 + 2 + 2 + 2 + 2 + 20 = 30 divided by 6 accounts = 5 years average age of accounts. The easiest way to do the math for yourself is by using our Tradeline Calculator.
Even most “experts” at other companies do not do this math correctly and often guess wrong, and therefore give bad advice to customers as to which tradelines to buy.
10. Not getting old enough tradelines
If you look at the example above, you will see how easy it is to underestimate how old of a tradeline you may really need in order to significantly improve your average age of accounts. Age is essential. Do not underestimate how difficult it is to significantly change an average. Use the Tradeline Calculator to know for sure.
11. Not buying your tradeline far enough in advance before the reporting date
When you place an order for a tradeline, there is a processing time in order for the tradeline company to receive the funds. For example, with our eCheck payment method, it may take up to 5 business days to receive the funds.
Then, the credit partners have up to two days to add the authorized user. The credit card company may then have their own processing time for updating their records internally. Next, the banks update the credit bureaus, and finally, the credit bureaus publish their records.
For this reason, our “Purchase By Date” is typically around 11 days prior to the beginning of the reporting period. So as long as you purchase the tradeline by the Purchase By Date, we guarantee that your tradeline will post in the next reporting cycle.
12. Urgently needing a tradeline to post, but only buying one tradeline and betting your entire outcome on that one posting
Our posting success rate is the highest in the industry, but even given this fact, credit report data is not always going to be perfect.
In other words, although rare, non-postings do occur, and if you are betting your entire outcome on the results of one tradeline, you may want to consider hedging your bets and buying two tradelines to be safe.
In short, two is often better than one for many reasons. If it is extremely critical to get a tradeline to post, it is safer to just buy two.
13. Buying tradelines instead of paying down your debt
If you have credit cards with high utilization, it is usually best to pay those debts down before buying tradelines.
Having credit cards with high utilization ratios is a negative factor in your credit report. This negative factor will always play a part in your overall credit picture as long as it exists.
The only real way to solve this problem is to pay down your credit cards. You should do the math using our Tradeline Calculator to see where your money is better spent, but in general, paying down your debt is usually the best advice.
14. Thinking tradelines will fix high utilization
Tradelines should not be thought of as the solution to high utilization on your credit cards. While tradelines can affect your overall utilization ratio, having individual cards with high utilization will still be a factor in your overall credit picture.
In other words, you should not only take into account your overall utilization ratio, but also the individual utilization of each of your credit cards and the number of cards that have high utilization vs. low utilization. Again, the solution to the problem is paying your cards down.
15. Not factoring in closed accounts when calculating your average age of accounts
Many credit scoring models factor closed accounts into their equation. For example, some people with zero open accounts can still have a good credit score. Clearly, the closed account data is still part of the equation.
If you end up needing your tradeline to stay active on your credit report for longer than two reporting cycles, you don’t have to buy a whole new tradeline when the time is up. We offer unlimited extensions in 1-cycle increments at half the cost of the original purchase price.
Simply let us know at least 2 weeks before the scheduled removal date if you’d like an extension.
Make sure to use trusted platforms that provide secure online transactions.
17. Buying tradelines from an unethical company
Unfortunately, in this industry, it can be hard to know who to trust. It is essential to do your research and choose a company you trust so you don’t waste your money on low-quality tradelines, tradelines that don’t post, or tradelines that are overpriced.
You also need to be sure to only use reliable platforms that provide secure online transactions. Warning signs that could indicate that a company lacks integrity include fake reviews, unavailable or poor customer service, and websites that are not secure or do not look professional.
18. Asking what the average boost of credit score is
We do not guarantee any boost of your credit score and we also cannot say what the average credit score boost from tradelines is. Tradelines affect everyone differently. One tradeline may help one person while that same tradeline may hurt another, and have no effect on someone else.
All tradelines will be relative to what you already have in your credit file. There is no meaningful average effect of tradelines in general.
Although we do not guarantee any boost of your credit score, often when we hear a variation of the following question. The request goes something like this… “I currently have a 520 credit score but I want to be over 700. What tradeline do you recommend to accomplish this?”
Again, we are unable to answer these kinds of questions, but in talking about this topic in general, who says that it is even possible to go from a 520 to over 700 anyway? Not us. (Although we are not saying it is impossible either.) We just do not advise on these types of credit score requests.
But going back to talking in general, if someone has a 520 credit score they probably have some serious derogatory accounts in their credit. If they have such derogatory accounts in their credit file, their credit score will probably not be a 700 regardless of what other tradelines may exist in their credit file. So in this example, the question itself is flawed, since it may be impossible to begin with.
Even in less extreme examples, no one knows the exact credit score algorithms, so no one can say with certainty. Therefore, it is best to not ask that question, because whoever answers that question is making a wild guess and they could easily be wrong and give you bad advice.
Steer clear of CPNs, which could get you caught up in felony identity fraud.
20. Buying tradelines for a CPN
We do not sell tradelines to those trying to use CPNs.
The reason for this is that the Social Security Administration and the Federal Trade Commission have both stated that CPNs are not legitimate and that the use of CPNs to obtain credit is fraud and a federal crime. We highly recommend avoiding any person or business trying to sell you a CPN.
21. Thinking that buying a high-limit tradeline automatically means that you will also get approved for a high-limit credit card
Having a high-limit authorized user tradeline does not automatically guarantee that you will get approved for your own high-limit credit card. Most banks that offer credit cards will typically also consider your income, expenses, credit score, and possibly several other factors relating to your ability to repay debt in order to make a decision on whether or not they are willing to extend credit to you.
22. Mistaking tradelines for credit repair
Buying tradelines is not credit repair. Credit repair seeks to correct inaccurate items on your credit report. If you have inaccurate items on your credit report, you definitely want to get those items removed. [Disclosure: This article contains affiliate links.]
If you have bad credit, you may need to fix your credit in order to get the maximum benefit possible from tradelines.
Occasionally we get a call from someone who might tell us that they are currently 90-120 days late on 2-3 accounts and their credit score is in the dumps. Can we help someone with extremely bad credit? The answer is probably no.
Again, we are not able to advise on credit scores (only general information) but in our opinion, if they are currently that far behind on bills and have multiple major derogatories on their credit report, there is no way they can have good credit without correcting the situation.
After all, a credit score is meant to calculate the likelihood of someone defaulting on a credit account, and if they are proving that they are currently in default, then their credit score is going to reflect that. The best advice is to pay those accounts current if they are trying to improve their credit.
24. Buying tradelines from the wrong banks that don’t post well
The truth is that most banks across the country do not post authorized user data very reliably. In other words, with most banks, the odds of a non-posting are very high.
Our company has tried out almost all of the common banks, and due to our high volume of tradeline sales, we have amassed a large amount of data. We know which banks post well and which ones do not. In fact, just about every other tradeline company out there sells tradelines from many more banks than we do.
The reason for this is not because we do not have that inventory available. It is because our integrity level when it comes to the reliability of our postings is so important to us.
The truth is that any company who sells tradelines from more banks than we do automatically has a higher non-posting probability and a lower integrity level. Saying it bluntly, we have the highest posting success rate in this industry because we only work with the best of the best banks that post the most reliably. All other tradeline companies have a lower posting success rate because they work with banks that are less reliable.
If you have a bankruptcy or collection with a bank, tradelines from that bank may not post for you.
25. Having filed bankruptcy with the bank you are ordering a tradeline with
It is possible that some banks will not work with a person if they have filed bankruptcy with that bank. They may be in a sort of “blacklisted” status with that bank.
This can also apply to authorized user positions. Therefore, if you owed a debt to a particular bank when filing for bankruptcy, it is best to choose a tradeline from a different bank as a precaution.
26. Having outstanding collections against the bank you are ordering a tradeline with
Similar to the point made above regarding bankruptcies, having outstanding collections with a certain bank could also pose an issue. The collection status is probably less of a risk of non-posting than the bankruptcy status, but it is still worth mentioning as a potential problem.
27. Thinking that primary tradelines are the best option
Since there are many different credit scoring algorithms, everyone actually has many different credit scores.
Often the main goal of someone shopping for tradelines is to eventually open their own primary accounts. However, we regularly get calls from people asking if we sell primary accounts. The answer is no, we do not.
Being the primary borrower on an account means someone extended credit to that individual and they are financially responsible for that account. In other words, that person is actually issued credit.
We know of some options within the tradeline industry where companies really will issue credit and that accomplishes the “primary tradeline” desire that some consumers have, however, they are usually relatively low limits, and of course, they have no age since it is a brand new account.
So is a primary account with a low limit and no age better than an authorized user tradeline with a high limit and lots of age?
From what we have seen, if we had to choose between these two scenarios above, we believe the authorized user tradeline with age and a higher limit would be the more powerful choice.
28. Not realizing that you have many different credit scores
Each major credit bureau has its own algorithms and reporting methods, and even within each credit bureau, there are many different versions of credit scoring models. Often, the score that is used depends on what kind of company is ordering the report.
For example, not only might your credit score be different at each credit bureau, but the score might also be different depending on whether you are applying for a mortgage, a credit card, a car loan, or trying to rent an apartment.
The credit scoring algorithm used might be one of many different versions of the FICO score, or it could be a VantageScore.
It is possible that each person has over 30 different credit scores. If you google “how many credit scores do I have,” you can read more about this.
The authorized user must use the correct address that is on file with the credit bureaus to ensure the tradeline will post.
29. Not using the correct address that is on file with the credit bureaus
When adding an authorized user to a credit card, it is important that the authorized user provides the correct address that is on file with the credit bureaus. The authorized user’s address is a data point that helps identify the person, and if that does not match up, there can be issues with the tradeline posting.
Check your credit reports to confirm that the address in your file is correct and then make sure to provide this same address when purchasing your tradelines.
30. Having no credit score at all
There are instances where some people do not have any credit score at all. There may be several reasons why this is the case.
For one, maybe the person just never had any credit at all. If this is the case, then getting a tradeline to post should not be a problem.
Another possibility is that the person had derogatory items on their credit report and participated in some sort of aggressive credit sweep or credit repair deletion service that essentially deleted everything from their credit report.
In these types of scenarios, getting a tradeline to post can be a problem. Sometimes there may be blocks on that person’s credit file that prevent the new authorized user account from posting.
31. Not having enough tradelines or having only authorized user tradelines in your credit file
As we mentioned, having a good mix of various credit types is important to building good credit. Therefore, you do not want your entire credit profile to be made up of authorized user tradelines exclusively.
In general, the best credit profiles belong to people who have multiple tradelines from a variety of different types of credit, including credit cards, auto loans, mortgages, installment loans, etc.
A tradeline alert is a notification that a new or updated tradeline has posted to your credit file. To set one up, you will need to sign up for a credit monitoring service.
We ask our customers to make an account with Credit Karma, a free online service that automatically notifies you when new accounts have been added to your TransUnion or Equifax credit report. Credit Karma is also how you will verify whether or not your tradeline has posted.
33. Entering your personal information incorrectly when placing an order
As we alluded to above, there are certain pieces of information that need to match up in order for a tradeline to post to your credit report, such as your name and address. In order for the banks and credit bureaus to verify your identity and link the tradeline to the correct credit profile, the personal information you provide when buying tradelines needs to be 100% accurate, or else there is a chance that your tradelines will not post.
Unfortunately, people often make mistakes when typing in their names and addresses, which can result in their tradelines not posting. Be sure to double-check all of your information for accuracy and correct any typos before placing your order to ensure that your tradelines post to your credit report.
Although we are proud to have the best posting rate in the industry, we can’t prevent the occasional non-posting because unfortunately, the banks and the credit bureaus are not always 100% accurate in their reporting processes.
If your Credit Karma credit report has been updated after the last date within the reporting period and your tradelines still haven’t posted, you can follow these instructions to request a refund or exchange for the non-posting tradeline.
When buying tradelines, use some best practices to get your tradelines to post so there is a lower chance of having to deal with a non-posting.
Still feeling unsure about tradelines? Check out our Tradeline FAQs.
What mistakes have you seen when it comes to authorized user tradelines? Are there any common mistakes that you would add to this list?
There’s never a bad time to start building good credit, but there is definitely a good time to start: as early as possible. The earlier someone starts building credit, the easier it will be to seek credit as an adult. The question is: at what age can you start building credit?
Whether you want to start building your own credit or whether you want to help your child get a head start on preparing for their financial future, this article is for you. We answer the questions of when you can start building your credit, how to build credit for a minor, and how to build your child’s credit.
Why You Should Start Building Credit Young
Obviously, most children and teenagers don’t have access to credit cards or other credit products, for good reason. However, this doesn’t mean that teens cannot or should not build credit. In fact, quite the opposite is true.
Let’s look at an example to understand why it’s important to start building credit even before turning 18. If you’re an adult and you’ve never used credit before, but you now need an auto loan, what do you think is going to happen when you go and apply for a loan?
Since you don’t have a credit history, chances are, you’re probably going to get denied. If you do somehow get approved for an auto loan with no credit, it’s likely going to have a very high interest rate since you will be perceived as a risky borrower.
The moral of the story is that you can’t wait until you need credit to start thinking about building credit. You need to start building up a positive credit history early on so that you can have that good credit to rely on when you eventually end up needing it.
Beyond the issue of having access to credit when you need it, having good credit may also be important when entering the workforce. Many employers conduct background checks and check the credit reports of prospective hires, and having a solid credit history will reflect positively on applicants.
Having already established good credit will also come in handy when shopping for insurance, applying to rent a home, setting up utilities, and maybe even buying a cell phone plan. All of these industries typically conduct credit checks on applicants before getting into business with them.
How Do You Start Building Credit?
To build credit, of course, you need to use credit products. This is why many people wait until they are well into adulthood to try to start building credit, which, as we just learned above, is a mistake because it can hold you back when you actually need to get credit.
However, we all know how difficult it can be to get approved for credit when you don’t have yet have a credit history that shows creditors that you can manage credit responsibly. Lenders don’t want to take on the risk of lending to someone whose future behavior is hard to predict.
Secured credit cards, which require a security deposit as collateral, can be one way to start building credit.
So how do you start building your credit without a credit history? One option is to apply for a secured credit card, which involves putting down a security deposit as collateral against the credit limit of your card. Lenders can issue these cards to consumers with no credit without taking on as much risk since they can keep the deposit if you default on payments. [Disclosure: This article contains affiliate links.]
Another strategy is to apply for a credit-builder loan, which works in the reverse order of a traditional loan: first, you make all the monthly payments toward the balance of the loan; then, once you have finished making the payments, you receive the loan disbursement.
Since you have already fronted the money, lenders don’t have to face the risk of you not being able to pay back the loan. Because of this, as long as you have enough income to make the monthly payments, your chances of getting approved for a credit-builder loan are very high.
There’s an easier way to start building credit, though. If you can’t get approved for any primary accounts on your own, or if you want a “shortcut” to building credit without having to wait for your primary accounts to age, you can build credit fast by piggybacking on someone else’s credit.
Piggybacking simply means becoming associated with someone else’s credit account for the purpose of building credit. There are three ways to piggyback, which you can also see in our infographic:
Get a cosigner or guarantor who can be held responsible for the debt if you cannot pay it. Open a joint account with someone who has good credit and can help you get approved for the joint account. Become an authorized user on someone else’s seasoned tradeline that is in good standing.
The first two of these three piggybacking methods involve opening new primary accounts, which means you have to wait a few years for the accounts to gain seasoning before they start to help your credit in a more significant way.
On the other hand, piggybacking as an authorized user means you can be added to an account that already has plenty of age and on-time payment history. That’s why it’s one of the most convenient ways to start building credit fast.
How to Help Your Child Build Credit
Teach your child about credit before they get a credit card so they don’t make the mistake of getting deep into debt.
Unfortunately, financial literacy is usually not emphasized in schools, so the responsibility of educating children about credit and helping them build credit falls primarily to parents and guardians.
It’s important to not only know how to help build your child’s credit but also to teach them the basics of financial literacy so that they will one day be able to manage their finances and their credit on their own.
Lay a solid foundation by teaching them about budgeting and saving. If your child is old enough to work, that can be a good opportunity to see how they manage their income.
Then you can move on to the world of credit. Your child needs to have an understanding of how credit works before getting a credit card or they could be headed for disaster.
In a survey of college students conducted by U.S. News in August of 2019, about 35% of students surveyed said they were not taught about fundamental financial topics before getting a credit card. A lack of understanding about how credit works and how to use it responsibly can easily lead to getting deep into debt and a lifetime of financial troubles.
In the same survey, 13% of students said they had over $8,000 in credit card debt, and almost 23% said they didn’t even know how much credit card debt they had. No one wants that to happen to their child, so make sure your kid knows how to use credit cards properly before they get one.
But beyond teaching your child the fundamentals of credit, can you build your child’s credit even before they get a credit card or loan of their own?
How to Build Your Child’s Credit Score by Piggybacking Credit
While helping them learn the ins and outs of the credit system, it’s also smart to help them get a head start on actually building credit via credit piggybacking, which means becoming associated with another person’s credit account.
If you have good credit, consider adding your child at an early age as an authorized user to one or more of your credit cards that are in good standing. If they’re not yet ready to use the account responsibly, you don’t necessarily have to give them access to a credit card. Alternatively, if you want to let them use a credit card, some credit card issuers may allow you to set spending limits for authorized users.
Piggybacking credit can help your child build credit early in life.
Being an authorized user on the account will still help them even if they don’t have spending privileges on the card. The positive payment history of that account will usually be reported on the authorized user’s credit profile, which can help kick start their credit score.
Unfortunately, according to the U.S. News study, about 75% of the college students that participated in the survey said they did not become an authorized user on someone else’s account before getting their own credit cards. That means they likely missed out on the lower interest rates and other perks that come with having an established positive credit history.
This statistic is not surprising. As we learned in our article, “What Happened to Equal Credit Opportunity for All?” equal credit opportunity is sadly not a reality in our country. Wealth disparities and historical discrimination prevent many Americans from being able to establish good credit and get ahead in life.
Those with wealth and financial education commonly used the authorized user piggybacking strategy to help their children build credit, while at the same time there are many young people who don’t have parents or loved ones that can help them establish credit. The tradeline industry helps to address this problem by providing access to authorized user tradelines to all consumers.
It’s clear that the authorized user strategy is an ideal way to help your child build credit. But when can you actually start building credit? Is there a minimum age requirement to be an authorized user? Can you start building credit before 18, for example?
At What Age Should You Start Building Credit?
It can be difficult for young adults to get approved for a credit card on their own since credit card issuers are required to check applicants’ income before issuing them credit. However, by using the authorized user credit piggybacking strategy, young people can start building credit earlier than you may think.
Minimum Age for Authorized User on Credit Card
Many credit card issuers have no minimum age requirement for authorized users.
A survey by creditcards.com revealed that half of the major credit card issuers surveyed, including Bank of America, Capital One, and Chase, had no minimum age requirement for authorized users! That means that with many of the most common credit cards, you can add your child as an authorized user at any age.
Credit card companies that do have age requirements, such as American Express, Barclays, Discover, and US Bank, typically impose a minimum age limit that is between 13 to 16 years old.
Check with your credit card issuers to see what the minimum age requirement is for authorized users on your cards.
In addition, check with your credit card issuers to see whether they report authorized user information to the credit bureaus since not all banks do. If you’re purchasing a tradeline, however, you don’t have to worry about that, since all of the banks we work with do report to all three major credit bureaus.
Conclusion
It’s a smart idea to help your child build credit early so they can start their adult life on a financially sound footing. If you have good credit yourself, the easiest and fastest way to build your child’s credit is by adding them as an authorized user to one or more of your credit cards that have a perfect payment history.
Kids can become authorized users at any age with some credit cards, while there is a minimum age requirement of 13 to 16 years with other cards. Check to see what your bank’s policy is.
Unfortunately, many people do not have access to this credit-building strategy. If you are one of those people, consider purchasing a seasoned tradeline when it comes time for your child to start establishing a credit history.
It’s never too early to start building good credit!
Did your parents teach you about credit at a young age? How do you plan to help your child build credit? Share your thoughts below!
Credit repair can be a long and arduous process, especially if you have very bad credit. Getting results from credit repair can take months, and it takes years to build or rebuild a solid credit history.
However, there are some “credit hacks” that you can use to improve your credit on a much shorter time scale.
In this article, we’re going to tell you the best credit hacks to improve your credit score as well as credit card hacks that work to help you save you money on interest. In addition, we’ll also provide some credit-building hacks for those with thin credit files and credit repair hacks to help you fix bad credit.
Here are the credit hacks we’ll be covering in this article. You can click on the bulleted list items below to jump directly to each hack.
Now let’s delve deeper into each credit of these credit hacks.
Credit Score Increase Hacks
Pay down high-balance cards first to improve your credit utilization
If your focus is primarily on boosting your credit score fast, you may want to consider paying down your high-balance cards first. The reason for this can be explained by the importance of individual credit utilization ratios, which refers to the utilization ratios of each of your revolving accounts.
From what we have seen, individual utilization ratios may be even more important than your overall utilization ratio. Having one or more maxed-out accounts, for example, can drag down your score even if your overall utilization ratio is low.
Therefore, by paying down your high balances first, you can get those accounts out of the high-utilization danger zone and into a utilization range that is less damaging to your credit score.
Pay off low-balance accounts to reduce the number of accounts with balances
One of the factors that are considered within the overall “credit utilization” category is the number of accounts that have balances. Having fewer accounts with balances is better for your score. In fact, the ideal credit utilization scenario is having a zero balance on all but one of your accounts and having one account with a utilization ratio in the 1-3% range.
Therefore, if you can pay some of your accounts down to zero, you should see a boost to your score. Accounts with small balances are low-hanging fruit because you don’t have to spend as much money to get them to a zero balance.
Time your payments so that you have a $0 balance on your statement date
To ensure that your credit report shows low credit utilization, time your payments so that you have a low balance (or no balance) when your accounts report to the credit bureaus.
When it comes to credit utilization, you might think that as long as you pay your credit card balance in full by the due date every month, then you should show a 0% utilization for that account. However, this assumption is not necessarily correct. The reason for this is that the date when your credit card issuer reports to the credit bureaus is often not the same as your due date.
That means that your account is reporting at some other time during the month when your card does have a balance on it. If you use a significant portion of your credit limit, that utilization could be hurting your score.
To correct this, if you want to have your accounts show a 0% utilization ratio, try using this credit hack: Instead of waiting for your statement to arrive and then paying your balance on the due date a few weeks later, you need to pay your balance to $0 before the statement closing date. Then, your statement will close with a $0 balance and that’s what will report to the credit bureaus.
Alternatively, you can pay your bill on your normal schedule and then refrain from using your card for the next entire billing cycle. Since you have paid off the balance and not made any new charges, your account will show a $0 balance at the end of the reporting cycle.
Either way, if you can shift the timing of your payments so that your account reports a 0% utilization, that could provide a significant benefit to the credit utilization portion of your credit score.
Credit-Building Hacks
Build credit fast by piggybacking on someone else’s good credit
One of the easiest and fastest ways to build credit is called credit piggybacking, which refers to the practice of becoming associated with someone else’s good credit for the purpose of helping you build your own credit history.
Piggybacking credit can help you build credit quickly, whether you open a joint account, get a cosigner, or become an authorized user.
There are three main ways to piggyback credit.
Get a co-signer or guarantor
Having a co-signer or guarantor with good credit can go a long way toward helping you qualify for credit because the co-signer or guarantor is essentially promising to assume responsibility for the debt if you default.
The downside of this strategy is that since the position of the co-signer or guarantor comes with a lot of risks, it can be difficult to find someone to take on this role for you.
Open a joint account
Since both applicants are considered when opening a joint account, you can benefit from your partner’s good credit as well as the fact that the income of both applicants can be counted. If you maintain the joint account for a while, this can allow you to build up a credit history with a primary account.
However, many banks no longer offer joint credit cards, so your options for opening a joint account may be limited. Plus, if your relationship with the other account holder ever takes a turn for the worse, it can make managing the account difficult, and you may end up needing to close the account altogether.
Become an authorized user
Becoming an authorized user on a seasoned tradeline (i.e. a credit account that already has at least two years of positive payment history associated with it) is the fastest way to build credit. Instead of opening your own primary account and waiting for it to age, you can add years of credit history to your credit profile within a few weeks or even days.
Consider applying for a credit-builder loan
If you have bad credit or if you have never used credit before, you might be feeling discouraged about the prospect of getting credit anytime soon. It can feel impossible to get credit if you have a thin credit file or a history of derogatory marks on your credit report.
A credit-builder loan can be a useful tool for those struggling to build credit. Here’s a summary of how they work:
Credit-builder loans are typically for small amounts (e.g. a few hundred to a thousand dollars). A credit-builder loan functions like a backward version of a traditional loan: instead of receiving the funds upfront and paying the money back later, you first make all of the monthly payments and then receive the loan disbursement once you have already paid off the loan. For this reason, these types of loans are low-risk for lenders, which is why even those with bad credit or thin credit can still qualify (provided your income is sufficient for you to make the monthly payments). The lender reports your payment history to one or more of the major credit bureaus, which allows you to build a credit history.
For more information on how these loans work and whether a credit-builder loan might be a good strategy for you to consider, check out our article, “Credit-Builder Loans: Can They Help You?”
Credit Card Hacks
Increase your credit limit
Increasing your credit limit is one of the best credit hacks. Check out our article for more tips on how to request a credit line increase.
Increasing your credit limit can be one of the easiest and fastest ways to boost your credit score. However, you’ll want to strategize a little before requesting credit line increases from your lenders.
If your financial situation has improved since opening your credit cards, it might be a good time to request a credit line increase. For example, if you have received a raise at work or your credit score has increased, that could indicate to lenders that you can handle a higher credit limit responsibly. Wait until you have been a responsible cardholder for at least six months and you don’t have too many inquiries on your credit report to make your request. Also, don’t request an increase if you have already requested one within the past six months. Check with your credit issuer to see whether they will need to do a hard inquiry or soft inquiry. If you don’t want to get a hard inquiry on your credit report, ask if there is an amount they may be able to approve without doing a hard pull on your credit. You can make your request for a credit limit increase online or over the phone. Be prepared to provide some financial information and to explain why you are asking for additional credit. Calling your bank and talking to a representative may give you more opportunities to negotiate than if you make the request online.
So, how does this hack improve your credit score?
Your credit utilization ratio, also called your debt-to-credit ratio, makes up about 35% of your FICO score and about 20% of your VantageScore. It’s defined as the ratio of how much debt you owe to the amount of credit you have available. This can be calculated for your revolving credit accounts in aggregate by adding up all of your balances and dividing by the sum of all your credit limits for those accounts.
Ask your credit card issuers for lower interest rates
This is another credit card hack that is easier and quicker than you might think. All you need to do is call up each of your credit card issuers and ask them to lower your interest rate.
Try calling your credit card issuers and asking for lower interest rates—odds are good that they will grant your request.
Again, you’ll want to do a little homework before asking for a lower interest rate. Research interest rates on cards from other issuers and see if your bank can match a lower number. Explain why you’ve been a good customer and why you feel your rate should be lowered. Also, describe how your financial situation may have improved since you opened the card.
You can find a detailed script to help you negotiate on creditcards.com.
Although this tip doesn’t directly affect your credit score, it can still be hugely beneficial, especially if you are one of the 37% of American households that carry balances on their credit cards from month to month.
Lowering your interest rate decreases the debt burden that comes from interest charges each month, allowing you to pay off your debt faster. Paying off your debt faster means improving your utilization ratio, which leads to a better credit score!
Although this hack isn’t guaranteed to work, the worst that could happen is that your lenders deny your request and your interest rates stay the same. On the other hand, it could save you hundreds or even thousands of dollars in interest. Plus, you can be optimistic about your chances: polls show that over three-quarters of consumers who ask for a lower interest rate are successful in their request.
Set up automatic bill payments
Setting up automatic payments is one of the best things you can do for your credit, especially if you struggle to remember due dates or if you have accidentally missed payments in the past. Payment history is the number one factor that influences your credit score, so even one late payment can have a serious impact on your credit.
Setting up automatic payments for all of your accounts can help prevent you from accidentally missing a payment.
Take human error out of the equation by setting up automatic payments for all of your loans and credit cards. That way, you’ll never accidentally miss a payment, so you can continue to build up a positive payment history each month without even thinking about it.
Pay down high-interest balances first to save money on interest and pay off debt faster
When it comes to paying off debt, the way to save the most money on interest is to pay off your high-interest balances first. This method is called the “debt avalanche” because you’re starting with the highest interest rates and working your way down from there. (In contrast, the “debt snowball” method involves paying your debt in order of smallest to largest balances).
Transfer your balances to a card with a lower interest rate
Another popular way to get some relief from paying those astronomical interest charges every month is to transfer your credit card balances to another credit card that has a lower interest rate.
This hack works best if you have good enough credit to qualify for a balance transfer credit card. These credit cards are marketed specifically for this purpose and they typically come with special introductory offers, such as 0% APR on balance transfers for a certain number of months.
A balance transfer can help you save money on interest charges and may improve your credit utilization ratio.
Here’s how the balance transfer process works:
When you apply for the balance transfer credit card, you tell the credit card issuer the amount you want to transfer and which bank(s) you want to transfer a balance from. Once you have been approved for the balance transfer card, the credit card issuer essentially pays off your balances at the other banks with the credit on your new card. Your debts (plus a balance transfer fee, usually around 3-5%) have thus been transferred to your new card. Since your balance transfer card likely has a low promotional interest rate or perhaps even zero interest for a while, you have some extra time to pay off your debt without being crushed by interest, which means you can pay off your debt faster.
As a bonus, this credit card hack can also help your credit utilization, because you are adding some available credit to your credit profile by opening a new account.
The pitfall to watch out for with this method is that it opens up the possibility of you running up your credit cards again and potentially ending up even deeper in debt than you were before. If you think having access to additional credit is going to tempt you to spend more, then it’s probably best for you to avoid this credit hack.
Credit Repair Hacks and Bad Credit Hacks
Dispute inaccurate information on your credit report (such as inquiries or derogatory items)
Check your credit report for errors that could be damaging your score and dispute them with the credit bureaus.
If you have any errors on your credit report that are bringing your score down, such as credit inquiries or derogatory items that don’t belong to you or are otherwise being reported incorrectly, then this hack could definitely give your credit a boost.
First, you need to obtain a copy of your credit report to check for errors. You can order one from each of the three credit bureaus for free once a year at annualcreditreport.com and you can order your Innovis credit report for free directly from their website.
Then, thoroughly check your credit report for any inaccuracies, such as late payments that you actually made on time, duplicate accounts, or negative information that is more than seven years old (which means it should have been deleted by the credit bureaus already).
To fix the errors on your credit report, you can dispute the items with the credit bureaus by following the instructions found on each of your credit reports. However, there are a couple of other things you should keep in mind in order to ensure your dispute process goes smoothly.
Look up a sample credit dispute letter, such as the sample letter offered by the Federal Trade Commission, that you can use as a model for writing your own letters. Write one dispute letter for each credit report error and send in your letters one at a time. If you try to dispute several items at once, you run the risk of the claim being dismissed as “frivolous.” Be sure to include as much evidence as possible that supports your claim when submitting your dispute. Without documentation proving that the item is being reported incorrectly, the credit bureaus could dismiss your dispute. Send your letters along with the necessary documentation via certified mail so that you can get proof that the bureaus received them. In addition, you should also talk to the creditor that is reporting the inaccurate date to the credit bureaus in order to fix the problem at the source and prevent the error from showing up on your credit report again in the future.
Once the credit bureaus receive your dispute letters, they have 30 days to investigate the issue. If they cannot verify the information to be accurate, then they have to either update the item with the correct information or remove the item from your credit report.
For this credit hack, dispute collection accounts on your credit report that are inaccurate or outdated to have the credit bureaus update them or delete the collections altogether.
As we discussed above, if a collection account on your credit report is being reported incorrectly or doesn’t belong to you, then you can certainly dispute the inaccurate information and have the credit bureaus update or remove the item.
If, on the other hand, the collection accounts on your credit report are legitimate, then your options for removing them are limited.
Some consumers try to negotiate a “pay for delete” arrangement with the debt collector, in which the debt collector agrees to stop reporting the collection to the credit bureaus in exchange for you paying some or all of the debt. However, this strategy is risky and it does not always work in the consumers’ favor. If you do try this approach, be sure to get the agreement in writing from the collection agency.
In addition, deleting a paid account might not even increase your credit score depending on which credit scoring algorithm is being used. Simply paying the collection may be enough to boost your credit score, since some scoring models (FICO 9, VantageScore 3.0, and VantageScore 4.0) don’t penalize you for having paid collections on your credit report.
If you want to delete a collection account without paying it, unfortunately, your only legitimate option is to wait for the collection to be removed from your credit report automatically, which happens seven years after the date that you were first delinquent on the account.
Time your credit inquiries carefully when shopping for credit
If you’re planning to shop for credit in the future, you’ll probably be getting some hard inquiries from lenders on your credit report.
Lenders typically need to check your credit history before they can decide whether or not to extend you credit, so when you apply for a loan or credit card, the lender will often request a “hard pull” of your credit report from one or more of the credit bureaus.
While it’s unlikely that inquiries alone will ruin your credit score, since each inquiry can potentially subtract a few points from your credit score, it is still important to be mindful of the frequency and the timing of your credit applications in order to minimize the impact of inquiries on your credit report.
Thankfully, though, you can still shop around for the best loan without being punished by the credit scoring algorithms. FICO and VantageScore know that it’s financially smart to shop for the best rates, not risky. Therefore, they each have ways of accounting for this behavior so that your loan applications don’t have an outsize impact on your credit score.
When applying for credit, try to minimize the impact of credit inquiries by grouping your applications within a specific time frame.
FICO scores group together inquiries that occur within a certain time frame for student loans, auto loans, and mortgages. Older FICO scores allow a 14-day window for consumers to apply for multiple loans of the same type (such as mortgages), while newer FICO scores allow a 45-day window.
Each inquiry for the same type of loan within the given time period gets grouped together and only counted as a single inquiry. However, note that this rule does not apply to credit cards, for which each inquiry will be counted separately.
With VantageScore, all inquiries that are made with a 14-day period are grouped together, regardless of the types of accounts—even credit cards.
To simplify this information into a general rule, if you can complete all of your hard credit inquiries for a given type of loan within 14 days of each other, then the inquiries will be grouped together and you can avoid ending up with way too many inquiries on your credit report.
Get a rapid rescore from your mortgage lender
Once you’ve tried some of these credit hacks and optimized your credit report, the fastest way to see your results reflected in your credit score is to get a rapid rescore. For those who are about to apply for a mortgage but need to quickly update their credit report first, a rapid rescore can be an extremely valuable tool.
To trigger a manual update of your credit report, obtain verification of your tradeline’s new status from your creditor and then forward the letter to the credit bureaus.
Since rapid rescores can only be provided by mortgage lenders, if you’re not in the market for a mortgage but you need to update your credit report in a hurry, you’ll need to update your tradelines manually.
To do so, once you have made the desired changes to your tradelines (e.g. paying down your balances or correcting errors), contact your creditors and ask them to send you a letter verifying the new account information. Then, forward this letter to the credit bureaus so they can update the information in your credit report.
By initiating the update manually, you can bypass the period of time that you would otherwise have to wait until your next reporting period.
Conclusions on Hacks to Improve Your Credit
While there is no substitute for the time and effort required to establish and maintain a respectable credit history, that doesn’t mean that you can’t try some of these credit-boosting hacks to help you improve your credit right away and perhaps even save some money on credit card interest and fees.
Just make sure not to lose sight of the most important goal, which is to build good credit over time and keep your credit report in good condition long-term.
Let us know what you think of these credit hacks! Which are the best credit hacks in your opinion? Do you have any creative credit hacks that you would add to this list?
Most of the time when I’m asked about credit scores the line of questioning is commonly about how to improve scores. It’s equally often, and equally enjoyable, when I receive questions from people about how many points certain things from your credit reports are worth to their credit scores. The questions generally go something like this… “How many points is a charge off worth” or some variation of that question.
Not only are these questions common but they are also reasonable. We grow up in an academic environment where questions on tests are worth a certain number of points toward our final grade. For example, if you have a test with 25 questions then each question is worth 4 points for a possible grade of 100. Credit scoring systems, however, are not designed such that entries on your credit reports are worth any specific number of points.
That’s Not How Credit Scores Work
If you ever read a book or blog or hear someone suggest that credit report entries are worth a specific number of points, you can ignore it because it’s factually inaccurate. Nothing on your credit report is worth any specific number of points, either positive or negative. Scoring models do not assign points like that because they’re not designed to do so.
Instead, credit scoring models assign points based on how well you have performed in certain credit scoring categories. Without getting highly technical and jargon-heavy, points are assigned based on how your credit reports answer questions asked by the credit scoring models.
Buckets, Bins, Variable Classing…They’re All the Same Thing.
Credit scoring models are made up primarily of three things…characteristics, variables, and weights. These three things can also be described as…questions, answers, and points. These three work in concert as part of the scoring process. Here is an example of how it works:
Characteristic (aka, a question asked by the scoring model)
Example: How many credit card accounts do you have with a balance greater than zero?
Variable/Bucket (aka, the answer from your credit report)
Example: I have 4 credit card accounts with a balance greater than zero.
Weight (aka, the points assigned by the credit scoring model based on the answer)
Example: If you have between 3 and 6 credit card accounts with balances, you earn 20 points. As such, because you have 4 cards with balances you have earned 20 points.*
*This fictitious example isn’t meant to mimic the points you’ll earn for having four credit card accounts with balances. It’s simply meant to illustrate how scoring models work.
The variable or “answer” component is also commonly referred to as a bucket or bin. It’s essentially a range where the answer to a credit scoring characteristic/question falls. And, the weight or points are assigned based on which bucket/range your answer falls.
I recognize that this is complex and it might take you a few times reading through this to understand how it works. But, at the very least what this should expose is the truth that no item on your credit report is worth “x” points.
Instead, the bucket/range where your answers fall is what’s worth the points. And, you may have several answers that would cause you to fall into the same bucket, meaning multiple consumers with different credit reports can have the same credit score.
In the above example, the variable bucket was “between 3 and 6 credit card accounts with balances.” And, that bucket was worth 20 points to your credit score. So, if your credit report had either 3, 4, 5 or 6 credit cards with balances your answer would have fallen in the same bucket and you would have earned the same 20 points.
This is precisely why the people who try to assign a specific value to any one credit report entry are universally incorrect. In this example, you would have earned an equal 20 points toward your score even if you had 4 different credit reports.
Your Never “Lose” Credit Score Points
Here’s another one that’s going to blow your mind. Your credit score doesn’t start out at a perfect 850 and then go down based on your credit reports. You instead start low and accumulate points.
Nothing on your credit report is worth negative points. So, collections are not worth negative 50 points. Charge offs are not worth negative 100 points. It doesn’t work that way. Your score doesn’t go down because of negative information, it just simply isn’t as high as it could be because you’ll accumulate fewer points during the scoring process.
If you have any of those negative items, like collections and charge offs, you would fall into a bucket that would be worth fewer points than you would have fallen into if you did not have those types of negative entries. That’s why people who have negative entries have lower scores, generally, than people who do not. They earn fewer points, rather than lose more points.
You can apply these examples to every scorable entry on your credit reports. This includes inquiries, the presence or lack of negative information, debt and debt-related ratios, the age of your credit report information, and the diversity of your credit report entries.
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group and the author of four books about consumer credit. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has 27+ years of experience in the consumer credit industry, has served as a credit expert witness in more than 370 lawsuits, and has been qualified to testify in both Federal and State courts on the topic of consumer credit. John serves as a guest lecturer at The University of Georgia and Emory University’s School of Law.
Disclaimer: The views and opinions expressed in this article are those of the author John Ulzheimer and do not necessarily reflect the official policy or position of Tradeline Supply Company, LLC.
What is the difference between your overall credit utilization ratio and individual utilization ratios and why does it matter to your credit? Keep reading to find out.
Credit utilization makes up 30% of a FICO score.
What Is Credit Utilization?
To put it simply, credit utilization is the amount of debt you owe compared to the amount of your available credit. In other words, it is the amount of your available credit that you are actually using.
In terms of your credit score, credit utilization makes up 30% of your score, second only to payment history.
The reason credit utilization is such an important part of your credit score is that the ratio of debt someone has is highly indicative of whether they will default on a debt in the future. The more you owe, the harder it becomes to pay off all that debt on time every month, which makes you a riskier bet for lenders.
Components of Credit Utilization
According to FICO, there are several components that fall within the category of credit utilization, such as:
The total amount you owe on all accounts (overall utilization)
The amount you owe on different types of accounts
The utilization ratios of each of your revolving credit accounts (individual utilization)
The number or ratio of your accounts that have balances
The amount of debt you still owe on your installment loans (e.g. mortgages, auto loans, student loans)
What Is the Difference Between Individual and Overall Utilization?
Your overall utilization ratio is the amount of revolving debt you have divided by your total available revolving credit.
For example, if you have one credit card with a $450 balance and a $500 limit and a second credit card with a $550 balance and a $3,500 limit, your overall utilization ratio would be 25% ($1,000 owed divided by $4,000 available credit).
However, the individual utilization ratios of your respective credit cards are 90% ($450 balance / $500 credit limit) and 16% ($550 balance / $3,500 credit limit).
Since credit scores consider individual utilization ratios, not just overall utilization, having any single revolving account at 90% utilization is going to weigh negatively on the credit utilization portion of your score.
Overall Utilization May Not Be as Important as You Think
Typically, when people think of the effect that credit utilization has on credit scores, they often assume that overall utilization is the only important variable.
By this assumption, it would be fine to have individual accounts that are maxed out as long as the overall utilization is still low.
Individual utilization ratios may be more important than the overall utilization ratio.
However, we have seen that this is often not true.
For example, sometimes clients with maxed-out credit cards will buy high-limit tradelines in order to reduce their overall utilization ratio, but then they don’t see the results they were hoping for.
This means that the individual accounts with high utilization are still weighing heavily on the clients’ credit scores, despite the fact that they have improved their overall utilization. In other words, the decrease in the overall utilization ratio did not make much of a difference.
Cases like this seem to indicate that overall utilization may not play as big a role as traditional wisdom has led us to believe and that the individual utilization ratios may be more important.
Although the age of a tradeline is often its most valuable asset, tradelines can still help with some of the credit utilization variables.
Since our tradelines are guaranteed to have utilization ratios that are at or below 15%, this means that at least 85% of that tradeline’s credit limit is going toward your available credit, which helps to lower your overall utilization ratio. In fact, most of our tradelines tend to maintain utilization ratios that are much lower than 15%.
Buying tradelines also allows you to add accounts with low individual utilization to your credit file, which can help to improve the number of accounts that are low-utilization vs. high-utilization.
As a general rule of thumb, simply aim to keep your utilization as low as possible. However, you might be surprised to learn that having a zero balance on all revolving accounts is actually not the best scenario for your score.
According to creditcards.com, “…the ideal scenario tends to be having all but one card show a zero balance (zero percent utilization) and having one card with utilization in the 1-3 percent range.”
The average credit utilization ratio of consumers who have an 850 FICO score is about 4%.
Why? As it turns out, consumers with a 0 percent utilization ratio actually have a slightly higher risk of defaulting than those with low (but more than 0) utilization. A 0 percent utilization indicates that a consumer may not use credit regularly, which leads to the consumer having a higher risk of default in the future.
However, your utilization doesn’t necessarily have to fall in line with the above scenario in order to have a perfect credit score. In “How to Get an 850 Credit Score,” we found that consumers with FICO credit scores of 850 have an average utilization rate of 4.1%.
For those of us who use credit regularly, however, maintaining a minuscule balance may not always be practical. So what is a realistic threshold to shoot for?
While you may hear the figure 30% cited frequently, many credit experts say this is a myth and that you should aim for 20%-25% instead.
Tips to Avoid Excessive Revolving Debt Utilization
Spread out your charges between different cards
Since we have seen that it’s important to keep individual utilization ratios low, one strategy to accomplish this is to make your purchases on a few different credit cards instead of charging everything to one card. Spreading out your charges helps to prevent an excessively high balance from accumulating on any one individual card.
Pay off your balances more frequently
If you spend a lot on one of your cards, consider spreading out your charges between different cards or paying down the balance more often.
If you do spend a lot on one card, it helps to pay off your balance more than once a month. If your card reports to the credit bureaus before you have paid off your balance, it will show a higher utilization than if you had paid some or all of the balance down already.
You can either time your payment to post just before the reporting date of your card or you can make payments several times per month. Some people even prefer to pay off each charge immediately so their card never shows a significant balance.
Set up balance alerts to monitor your spending
To prevent mindless spending from getting out of control, try setting up balance alerts on your credit card. Your bank will automatically notify you when the balance exceeds an amount of your choosing, so you can back off of spending on that card or pay down your balance.
Don’t close old accounts
Even if you don’t use some of your old credit cards anymore, it’s often a good idea to keep the accounts open so they can continue to play a positive role in your overall utilization ratio and the number of accounts that have low utilization vs. high utilization.
Ask for credit limit increases
Another way to decrease your utilization ratios is to call your credit card issuers and ask them to increase your credit limit. By increasing your amount of available credit, you decrease your utilization ratio, both on individual cards and overall.
Keep in mind that your bank may do a hard pull on your credit to decide whether or not to grant your request, which could ding your score a few points temporarily. However, the small negative impact of the credit inquiry could be offset by the benefit of the credit line increase.
Also, this might not be an ideal strategy if you think you will be tempted to spend the new credit available to you, which could leave you even worse off than you started.
If you want to learn more about how you can successfully ask for credit line increases, check out our article, “How to Increase Your Credit Limit.”
Open a new credit card
Like asking for a higher credit limit, opening a new credit card can also lower your credit utilization, provided you leave most of the credit available.
Again, this will add an inquiry to your credit report, as well as decrease your average age of accounts, so this could have a negative impact on your score temporarily, which may be outweighed by the decrease in your credit utilization.
Transfer your credit card balances to different cards
A balance transfer is when you use available credit from one credit card account to pay off the balance on another credit card, thus “transferring” your debt balance from one card to another.
There are two ways to do this: you can transfer a balance to another credit card you already have, as long as it has enough available credit, or you can transfer a balance by applying for a new credit card and letting the card issuer know in your application which account you want to transfer a balance from and how much you want to transfer.
The latter option is best for your credit utilization, since opening a new credit card means you are adding available credit to your credit profile. In addition, it gives you the opportunity to apply for specific balance transfer credit cards, which usually come with low promotional interest rates on the balances you transfer.
However, using an existing account to do a balance transfer can still be beneficial if done properly, because it can help your individual utilization ratios. Just make sure the account you are transferring the balance to has a higher credit limit than the account that is currently carrying the balance in order to keep the individual utilization ratios as low as possible on each account.
Pay down smaller balances to zero
Having too many accounts with balances can bring down your score since credit scores consider the number of accounts in your credit file that are carrying a balance. If you have any accounts with smaller balances, paying those down to zero will decrease the individual utilization ratios on those accounts, reduce your overall utilization ratio, and reduce the number of accounts with balances, thus improving your credit profile in multiple ways.
People who are serious about improving their credit often wonder what it takes to get the highest possible credit score. For the FICO 8 credit scoring model, the perfect credit score is 850.
As of April 2019, only about 1.6% of scorable consumers in the United States have the elusive 850 credit score, which is actually an increase from 0.98% in April 2014 and 0.85% in April 2009.
There are many other credit scoring models that are used for different purposes and may have different credit scoring ranges. However, since FICO 8 is the most commonly used credit score, we will use the number 850 as the benchmark for the ideal credit score.
Check out the infographic below for some fast facts on how to get the highest credit score possible, then keep reading the article for even more tips on getting the coveted 850 credit score.
Payment History — 35%
Most people who have an 850 credit score have seven years of perfect payment history.
Your payment history is the biggest slice of the credit score pie, so even one late payment or missed payment can significantly affect your score. Negative items can stay on your credit report for up to seven years, so if you miss a payment, you may not be able to achieve a perfect 850 credit score until at least seven years have passed!
To safeguard against the possibility of forgetting to make a payment, consider setting up automatic bill pay for all of your accounts. Be sure to continue to check your accounts regularly in case of any system errors.
If you do miss a deadline once in a blue moon but have otherwise been an upstanding customer, try negotiating with your creditor to see if they will forgive the late payment and wipe it from your record.
FICO says that 96% of “high achievers,” or those with FICO scores above 785, have no missed payments on their credit report.
Essentially, to get an 850 credit score, you just need to follow one simple strategy: make all of your payments on time for a long time. We will further discuss the connection between payment history and time in the “Length of Credit History” section below.
Credit Utilization/How Much You Owe — 30%
The amount of debt you owe compared to your total credit limit is your credit utilization ratio. To get a perfect credit score, you’ll want to keep this ratio as low as possible, both overall and on each of your individual tradelines.
A study by VantageScore and MagnifyMoney found that people with the best credit scores and people with the worst credit scores actually had similar amounts of outstanding debt. However, those with the best scores had an average total credit limit of $46,700—16 times the credit limit of those with the worst scores!
Therefore, for the high scorers, that outstanding debt made up a much smaller percentage of their total available credit than those with low credit limits and poor scores, which highlights the importance of the overall utilization ratio.
This study reported that the average credit card user has an overall utilization ratio of 20%, which is generally considered to be a safe number for maintaining decent credit. To become someone who has an 850 credit score, however, you’ll need to keep it around 5% or lower. As of 2019, FICO says that the average revolving utilization for those with the “850 profile” is 4.1%.
While consumers with 850 credit scores do use credit cards, they tend to keep their utilization ratios around 5% or lower. Photo by Ellen Johnson.
In addition, keep in mind that even if you have a low overall utilization ratio, individual cards with high utilization could still bring down your score. You can read more about this in our article on individual vs. overall credit utilization ratios.
As a hypothetical example, let’s say you have two cards: one with a $10,000 limit and a $0 balance and the other with a $1,000 limit and a $900 balance. Your total available credit is $10,000 + $1,000 = $11,000 and your total debt is $900. Therefore, your overall utilization ratio is $900 / $11,000 = 8% utilization, which is a very good number.
However, your account with the $1,000 limit has a 90% individual utilization ratio! Since you only have two accounts, that means 50% of your accounts have high utilization, and that could negatively affect your credit. According to creditcards.com, maxing out just one credit card can reduce your score by as many as 45 points.
To get around this problem, if you have any individual cards with high utilization, consider transferring the balance to other accounts to keep the utilization ratio on each account as low as possible.
You could also request credit line increases from your creditors, which can lower your utilization ratios and benefit your score. Try using the tips we provide in “How to Increase Your Credit Limit.”
Another way to help with overall utilization is to add low-utilization tradelines to your credit file.
Optimizing this factor also means not closing old accounts even if you don’t use them very often, because their credit limits could be helping your score. To ensure old accounts don’t get automatically closed by the banks for inactivity, try to use them every 1-2 months, perhaps for small, recurring bills.
Length of Credit History (Age) — 15%
This category takes into account age-related factors such as the average age of your accounts, the age of your oldest account, and the ratio of seasoned to non-seasoned tradelines. (A seasoned tradeline is an account that is at least two years old, which is when the account is believed to have a more positive impact on your credit.)
Age goes hand-in-hand with payment history, because the more age an account has, the more time it has had to build up a positive or negative payment history. Together, age (15%) and payment history (35%) make up 50% of your credit score, which shows how important it is to open accounts early and make every single payment on time.
According to FICO, the age of the oldest account of people who have 650 credit scores is only 12 years, compared to 25 years for people who have credit scores above 800. In addition, individuals with fair credit have an average age of accounts of 7 years, compared to 11 years for those with excellent credit.
Cultivating an 850 credit score takes years of maintaining a positive credit history.
FICO reports that the average age of the oldest account of consumers who have 850 credit scores is 30 years old.
We have an in-depth discussion of which age tiers are most significant in our article, “Why Age Is the Most Valuable Factor of a Tradeline,” but the bottom line for getting the best credit score is simply to get as much age as possible. Seasoned tradelines can help by extending the age of the oldest account and the average age of accounts.
Also, keep in mind that it may be impossible to achieve an 850 credit score without a certain amount of age, even if you do everything else perfectly. So if you have stellar credit habits but haven’t yet been able to join the 850 credit club, you may just need to wait patiently for your accounts to age.
Credit Mix — 10%
While the mix of credit is one of the least important factors in a credit score, to get a perfect credit score of 850, you will still need to consider this factor.
In this category, credit scores reward having a balanced mix of several different accounts, including both revolving credit and installment loans. This is because creditors want to see that you can successfully manage a variety of different types of credit.
As an example, a credit file that includes an auto loan, a mortgage, and two credit cards has a better credit mix than a credit file that has four accounts that are all credit cards.
About the “credit mix” credit score factor, FICO says, “Having credit cards and installment loans with a good credit history will raise your FICO Scores. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly.”
The total number of accounts is also considered, with more accounts generally being better, up to a certain point.
FICO also states that high score achievers have an average of seven credit card accounts in their credit files, whether open or closed.
Auto loans are common among people who have 850 credit scores.
If you are looking to improve your credit mix statistics, adding authorized user tradelines can increase the total number of accounts and help diversify one’s credit file.
850 scorers also have installment loans in their credit files. According to Experian, the average mortgage debt for consumers with exceptional credit scores (800 or above) is $208,617. In addition, people who have FICO scores of 850 have an average auto-loan debt of $17,030.
Experian says, “In every other debt category except mortgage and personal loan, people with perfect scores had more open tradelines but less debt than their counterparts with average scores—underscoring the value of being able to manage debt while having numerous credit accounts.”
The “new credit” category of your credit score refers to how frequently you shop for new credit. This includes opening up new credit cards and applying for loans, for example. This “new credit” activity is reflected in the number of inquiries on your credit report.
Since seeking new credit makes you look like a higher risk to creditors, each hard inquiry has the potential to drop your score by a few points. Therefore, if you are going for a perfect 850, it’s best to avoid applying for new credit for a while.
However, it is possible to score an 850 with hard inquiries on your record. FICO recently stated that around 10% of 850 scorers had one or more inquiries within the past year, and about 25% had opened at least one new credit account within the past year.
If you need to shop for an auto loan or mortgage, be sure to complete all your applications within a two-week window in order for all of the credit pulls to count as one inquiry. For credit cards, however, each inquiry will be typically be counted individually.
Fortunately, inquiries only remain on your credit report for two years, and FICO scores only consider inquiries that occurred within the past year, so it shouldn’t take long for your credit to recover if you do have new inquiries on your credit report.
Inquiries aren’t the only thing that matters when it comes to the new credit factor of your credit score, however. It also includes data points such as the number of new accounts you have, the ratio of new accounts vs. seasoned accounts, and the amount of time that has passed since opening new accounts. The main idea if you want to maximize your credit score is to not open too many new accounts at once, which can make you look riskier to lenders and bring down your score.
More Tips on How to Get an 850 Credit Score
In addition to optimizing each of the above five categories that factor into your credit score, it is also important to regularly check for errors on your credit report and dispute any inaccurate information both with the credit bureaus as well as with the lenders who furnish the data to the bureaus.
In addition, those with very high credit scores rarely have serious delinquencies or public records on their credit reports, such as bankruptcies or liens. Obviously, this will be easy to avoid if you follow all of the suggestions above, but if you have a history of bad credit in your past, it could take up to 7-10 years to recover enough to get an 850 credit score.
850 Credit Score Benefits
What are the benefits of being in the 850 credit club? In reality, you’ll be able to take advantage of the benefits of having an excellent credit score whether you have a 760 credit score or an 850 credit score. You don’t need to score a perfect 850 to get the best credit cards or the best interest rates on loans.
Essentially, the main benefit of having the best possible credit score is bragging rights!
Final Thoughts on How to Get the Perfect Credit Score
While it’s probably not necessary to get an 850 credit score, it is smart to work toward the goal of having excellent credit by managing your credit wisely, which will eventually get you into the upper levels of high credit score achievers.
The most important factors of your credit score are payment history, utilization, and age. Therefore, to keep your credit in pristine condition, you’ll need to make all of your payments on time, keep your utilization as low as possible, and maximize your credit age. Beyond that, you’ll also want to maintain a balanced mix of accounts and minimize new credit inquiries.
Finally, take advantage of your three annual free credit reports to make sure your credit reports are free of damaging errors.
To summarize, here’s an example of what the credit profile of someone who has an 850 credit score might look like, as we illustrated in the infographic above:
No missed payments or delinquencies within the past seven years A high total credit limit The overall utilization ratio is 5% or lower Individual credit cards each have low utilization, around 5% or lower The oldest account is likely about 25-30 years old The average age of accounts is at least 11 years Typically has at least seven credit card accounts (whether open or closed) Usually has an auto loan and/or a mortgage loan May have additional installment loans Minimal inquiries within the past year No damaging errors on their credit report
Have you ever achieved the perfect 850 credit score? Is it a goal that you are currently working toward? Share your thoughts with us by leaving a comment below!
Most of us have credit reports assembled about us by the credit bureaus, yet few of us know about the surprising history of credit reporting.
The credit bureaus as we know them today grew from small, local organizations that formed as far back as the 1800s. In contrast, modern credit bureaus market themselves as expansive repositories of consumer information that can be used for an ever-growing number of applications.
Unfortunately, the early credit bureaus were known to use unethical tactics to collect information on consumers and sell this information to businesses.
While it may seem that the problems of these early credit bureaus have been addressed by legislation such as the Fair Credit Reporting Act, the credit reporting system still has serious flaws, some of which we highlight in “What Happened to Equal Credit Opportunity for All?”
In this article, we will explore the story of how credit reporting began, including how the credit bureaus originated and evolved into what they are today, and the many scandals that have taken place along the way.
What Is a Credit Report?
A credit report contains information about a consumer’s credit history. This includes a list of current and past credit accounts, along with the age, credit limit, balance, and payment history of each account.
It also contains identifying information such as your name, address, and social security number.
This information helps lenders evaluate the creditworthiness of potential borrowers so they can decide whether to extend credit and what the terms of the loan should be.
Credit bureaus, also known as credit reporting agencies or CRAs, are the companies that gather credit-related information about consumers and distribute it to lenders—and increasingly, other types of businesses who have an interest in checking people’s credit history.
In the United States today, there are three major credit bureaus: Experian, Equifax, and TransUnion. While there are many other credit bureaus, these three companies dominate the industry.
But it wasn’t always this way. The first credit reporting organizations were a far cry from the modern credit bureaus of today, and the unsavory tactics they used to run their businesses may surprise you.
Early Credit Reporting Agencies
The first recorded group that shared credit information about consumers was the colorfully named “Society of Guardians for the Protection of Trade Against Swindlers and Sharpers,” which was founded in London in 1776. The Society produced reports for its members on the credit history of individual customers, which were often full of gossip in addition to credit information.
The earliest credit reporting “agencies” were groups of merchants who would get together to gossip about customers. Painting by Joseph Highmore, public domain.
Credit bureaus would check local newspapers for news about consumers.
Like the Society, the early credit reporting agencies were small, local organizations that were essentially groups of merchants sharing information about consumers. This allowed them to offer credit to more people and avoid lending to high-risk individuals.
These organizations were industry-specific and did not share information with each other. In 1960, it is estimated that about 1,500 independent local credit bureaus were in operation in the United States.
The bureaus didn’t just collect the information you might expect, such as name and loan information. They also gathered sensitive personal information such as marital status, age, gender, race, religion, employment history, and driving records.
The credit bureaus didn’t stop there. They checked the local newspapers for announcements of promotions, marriages, arrests, and deaths, and attached news clippings to consumers’ credit reports. They would even go so far as to ask someone’s neighbors and colleagues for testimonies about that person’s character.
Even the local “Welcome Wagon” was working undercover for the credit bureaus. This organization would surreptitiously gather information on new residents of an area under the guise of welcoming them to the neighborhood.
The “Welcome Wagon” would secretly collect information on new neighbors for the credit bureaus. Photo by John Fowler on flickr, CC BY 2.0.
The credit bureaus were focused solely on serving the local creditors that belonged to their respective organizations. As such, they typically only reported derogatory information.
Furthermore, there was no standardized way to evaluate a person’s creditworthiness. It was all based on the subjective whims and prejudices of the creditor looking at their credit file.
What’s worse is that the credit bureaus did not allow consumers to view the information that was being reported about them. There was no way for consumers to verify whether the information was correct or where it came from.
Modernization of Credit Reporting
According to the Harvard Business School paper, over the course of the 1960s, many of these small, local credit bureaus started to join together, forming networks that spanned the nation.
In 1971, the Fair Credit Reporting Act (FCRA) was passed to ensure the “accuracy, fairness, and privacy of information in the files of consumer reporting agencies.”
By establishing requirements as to the accuracy and of consumer credit files and access to their information, the FCRA was intended to protect consumers from the unfair practices that were rampant in the credit reporting industry.
The Fair Credit Reporting Act
The FCRA enacted the following rights for consumers:
Consumers must be notified if negative action is taken against them because of the information in their credit file. Consumers must be able to find out what is in their credit file. Consumers must be able to dispute inaccurate information and have it corrected or deleted. Outdated information (generally more than 7-10 years old for negative information) cannot be reported. Consumers must provide consent for employers to check their credit reports. Consumers must have the option to request to be excluded from lists for unsolicited credit and insurance offers. Consumers who appear on a list of prospects requested by a lender must be extended a firm offer of credit.
As a result of the passing of the FCRA, credit bureaus stopped recording events such as marriages and arrests and started focusing more on verifiable credit history information. They also started reporting positive information in addition to negative information.
In 1996, the FCRA was amended to extend additional protections to consumers, including the following:
Consumers have the right to take legal action against anyone who obtains their credit report without a permissible purpose. Credit bureaus can be held liable for knowingly reporting misinformation. Credit bureaus must investigate disputes within a certain period of time, usually 30 days. Banks can share credit information with affiliates, but consumers must be given the opportunity to prohibit this sharing of their information.
The transition to computerized databases allowed some credit bureaus to expand and dominate the industry.
The advent of computer-powered databases allowed some credit reporting agencies to become more efficient and do more business, while smaller agencies that could not afford to make the change got out of the industry.
This consolidation eventually led to the domination of the market by the three major bureaus we know today.
Experian
While Experian did not officially come about until 1996, according to creditrepair.com, the story of Experian can be traced back almost 200 years.
The Manchester Guardian Society was formed in England in 1826 to share information on customers who didn’t pay their debts. This organization eventually became a part of Experian, as did a group of merchants that later formed in Dallas for a similar purpose.
These groups were both acquired by TRW, an engineering and electronics conglomerate that also launched their consumer credit reporting branch as Experian.
Experian was acquired by the British retail company Great Universal Stores Limited (GUS) and became part of their consumer credit reporting arm. In 2006, it demerged from GUS and began trading on the London Stock Exchange.
Although Experian as we know it today did not come along until after the FCRA was passed, the bureau has certainly not been free of controversy.
In 1991, a TRW investigator incorrectly reported that 1,400 people in Vermont had not paid their property taxes, which ruined the credit of those consumers. Several similar cases were discovered throughout New England.
Experian became infamous for their atrocious customer service and was hit with several lawsuits.
Later, Experian settled with the Federal Trade Commission (FTC) for operating a credit reporting scam in which consumers were led to believe they were signing up for a “free credit report” and were not told that they would automatically be enrolled in Experian’s $80 credit monitoring program.
The offending for-profit website, FreeCreditReport.com, is still in operation. As a reminder, the only site authorized to provide free credit reports as required by federal law is annualcreditreport.com.
They settled with the FTC again in 2005 for violating their previous settlement.
In 2015, Experian announced a data breach that existed for over two years and affected as many as 15 million consumers.
The bureau was then fined $3 million in 2017 for deceiving customers about their credit scores, along with TransUnion and Equifax.
TransUnion
TransUnion originally began as the holding company for a rail transportation equipment company in 1968. One year later, they entered the credit reporting industry by acquiring regional credit bureaus. The bureau has expanded steadily since then, although it is the smallest of the three major credit bureaus.
TransUnion has also been guilty of taking advantage of consumers.
Two consumers have sued TransUnion for refusing to remove inaccurate information on their credit reports.
They have also been accused of scamming consumers by not notifying them that they would be charged $18 a month for having a TransUnion account.
In June 2017, the largest FCRA verdict to date forced TransUnion to pay $60 million in damages to consumers who were erroneously included on a government list of terrorists and security threats.
Later in 2017, one of TransUnion’s websites was hijacked and made to redirect consumers to websites that attempted to download malware onto visitor’s computers.
Equifax
Equifax was started as Retail Credit Company by a grocery store owner. Photo by Charles Bernhoeft, public domain.
Equifax was started in 1898 by a grocery store owner who created a list of creditworthy customers and sold the list to other businesses. This business grew and became known as the Retail Credit Company.
The company expanded quickly throughout North America, amassing credit files on millions of Americans by the 1960s.
The Retail Credit Company developed a reputation for collecting extensive personal information on consumers and selling it to just about anyone who wanted it.
Critics accused them of reporting “facts, statistics, inaccuracies and rumors’…about virtually every phase of a person’s life; his marital troubles, jobs, school history, childhood, sex life, and political activities.”
Buyers of these reports would use them to judge the morality of individuals and avoid lending to those who they perceived as morally corrupt.
Consumers were not allowed to see their information, and many had no idea that the company had files on them in the first place.
When the company started planning to computerize their records, which would make consumer information more widely available, the U.S. Congress intervened, holding hearings that led to the Fair Credit Reporting Act being passed.
Equifax had to stop scamming consumers by lying about their identity and their motives when collecting information, among many other changes.
The Retail Credit Company changed its name to Equifax in 1975, which many speculate was a move to improve their damaged reputation after the congressional hearings.
Unfortunately for consumers, Equifax’s issues didn’t end with the Fair Credit Reporting Act. In recent years they have betrayed consumers’ trust even more egregiously.
Equifax ruined their reputation again in 2017, when their systems were breached by hackers twice, impacting hundreds of millions of consumers in the United States, Canada, and Britain.
The scam left the names, social security numbers, birth dates, addresses, driver’s license numbers, and credit cards numbers of consumers exposed for months, from May 2017 until July 2017.
Not only that, but Equifax did not disclose the breach until September of that year, giving top executives plenty of time to sell their shares of the company before going public with the announcement.
They continued to bungle their response to the breach by setting up websites that were supposed to allow consumers to determine whether they were affected by the Equifax breach but instead returned random results.
In addition, Equifax was allowed to charge fees for credit freezes in many states, which gave them the opportunity to actually make money off of this breach.
Nearly two years later, Equifax has still not been penalized or held accountable for this horrific failure in any way. In fact, they just went back to selling credit monitoring, and they are now making more money than ever.
For a fascinating in-depth investigation of the 2017 Equifax breach, listen to the podcast “Breach.”
There is virtually no end to the list of disastrous errors committed by Equifax, but here are some more of the highlights:
The bureau repeatedly tweeted a link to a fake Equifax phishing website, directing consumers to enroll in fraud prevention services at the imposter site.
Equifax left their systems vulnerable to a series of cyberattacks that affected hundreds of millions of people.
Equifax left the private data of approximately 14,000 Argentinian consumers and staff members open to anyone who entered “admin” as the username and password for one of its online portals. The company removed its mobile apps from app stores in 2017 because they had security flaws that left them vulnerable to cyber attacks. A website operated by Equifax exposed the salary histories of tens of thousands of people to anyone that had someone’s Social Security number and date of birth, both of which were in the hands of criminals after the security breach. In October 2017, Equifax’s website was hacked and made to serve malware disguised as a software update, leaving visitors to the site at risk of having their computers infected by the malware. The company has been sued hundreds of times and fined millions of dollars by the Federal Trade Commission for violating the FCRA.
Sadly, it seems Equifax has not changed for the better since their early days of selling people’s private information to anyone and everyone, since they have allowed criminals to easily access consumer data on a massive scale.
Innovis: The Fourth Credit Bureau
Many people are completely unaware that there is actually a fourth major credit bureau called Innovis. It was founded as Associated Credit Bureaus in 1970 and changed its name to Innovis in 1997. The company is now owned by CBC companies, which purchased Innovis in 1999.
In contrast to the other consumer reporting agencies (CRAs), credit reporting is not the primary function of Innovis. In fact, Innovis does not even offer credit scores.
Innovis instead serves businesses by providing “consumer data solutions” such as identity verification, fraud prevention, receivables management, and credit information. According to finance writer Sarah Cain, Innovis’ credit reports are used primarily to compile lists of pre-approved consumers to sell to lenders for marketing pre-screened offers.
Innovis also states on their website that as a CRA, they “enable” personal solutions such as credit reports, credit disputes, fraud alerts, active duty alerts for consumers in the military, credit blocks, security freezes, and opt-outs.
What Is In Your Innovis Credit Report?
Your Innovis report, like your other credit reports, contains your personal information as well as your credit history. However, they do not receive credit information from all of the same lenders that report to the other three major credit bureaus. If you pull your Innovis credit report, you may notice that some of your credit accounts are missing, particularly revolving accounts.
Your credit report will also show inquiries if any businesses have pulled your file from Innovis.
While you can’t get your Innovis credit report from annualcreditreport.com, you can order a copy directly from the company for free once a year.
Who Uses Innovis Credit Reports?
While there are some anecdotal reports of credit card companies pulling consumers’ Innovis credit reports for lending decisions, it seems that their reports are used mostly for pre-screened marketing offers. Innovis’ services are also used by companies such as cell phone service providers.
Is CBCInnovis the Same Company?
Confusingly, there is another company owned by the same parent company as Innovis called CBCInnovis. Although CBCInnovis and Innovis share similar names, they are different companies with different functions.
Unlike Innovis and the other credit bureaus, CBCInnovis does not maintain a repository of consumer credit data. Rather, it serves as a third-party company that pulls consumers’ credit reports from Experian, Equifax, and TransUnion and compiles the information into one “tri-merge” credit report. These tri-merge reports are sold to lenders such as banks and mortgage companies.
Discrimination in Credit Reporting
Unfortunately, historical discrimination is still baked into the credit system.
You might think that discrimination in the credit system is a thing of the past, left behind with the shady information-gathering tactics of the earliest credit bureaus.
Unfortunately, although discrimination is officially prohibited by the Equal Credit Opportunity Act, inequality is still rampant in the credit industry today.
Past and present discrimination against minorities in the United States affects consumers in ways that have dramatic effects on credit scores. A study by the Federal Reserve Board revealed that on average, blacks and Hispanics have lower credit scores than non-Hispanic whites and Asians, even after controlling for personal demographic characteristics, location, and income.
The credit system further burdens those who are less privileged and provides very few opportunities for disadvantaged consumers to improve their situation.
Conclusion on the History of Credit Reporting
Credit reporting agencies have a surprisingly long and sordid history. From the 1800s to today, the consumer credit reporting industry has been plagued with bias, inaccuracies, and serious security issues.
While technological advancements have allowed the credit bureaus to expand and improve, and government regulation has been enacted to protect the rights of consumers, the system is still far from perfect.
Ultimately, the credit bureaus were built to serve lenders, not consumers, and that remains their primary purpose. We are reminded of this every time consumers are harmed by the incompetent or even outright malicious actions of the credit bureaus.
Have you been affected by a credit reporting scam or a security breach? Let us know in the comments, and please share this article if you liked it!
In the world of consumer credit, there are a number of Federal laws or “statutes” which help consumers in regards to their personal credit. Two such notable statutes are the Fair Credit Reporting Act, more commonly referred to as the “FCRA”, and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, more commonly referred to as the “CARD Act.”
Both of these laws are consumer protection statutes, meaning they were designed to protect consumers from supposed big bad industry players. But do they really help consumers to better manage or even to establish or re-establish credit? If you dig deeper into the fine print of some of the so-called “protections” you might answer, “no.”
The Fair Credit Reporting Act
The FCRA has been around since the early 1970s, is some 90 pages long and has been amended dozens of times. In the world of consumer credit reporting, the FCRA is essentially the Bible. The FCRA is best known for providing the following protections to consumers, complete with its shortcomings;
Right to free credit reports: Since 2003 every U.S. citizen with credit reports has had the right to see those credit reports at no cost once every 12 months. The website where you can claim those Federal freebies is www.annualcreditreport.com. I’ve often made the point that while “once every 12 months” may have made sense in 2003, it doesn’t make sense in 2019. Given the number of large-scale data breaches and expanding consumer awareness of credit reporting it seems like once every 12 months has become insufficient.
You have the right to dispute inaccurate information on your credit report.
Right to dispute: If you believe something on your credit reports is incorrect, you have the right to dispute that information, for free. When you dispute the information the credit reporting agencies and the companies that furnished the information must perform a reasonable investigation. Many years ago I was critical of this process, but my stance has evolved.
The dispute process has become much more consumer-friendly and is normally completed within a couple of weeks rather than the allowed-for 30 days. Consumers can now add supporting documents/attachments to their dispute communications and the credit reporting agencies can and do override responses from their data furnishers, disproving the assertion that the credit bureaus simply “parrot” what’s reported to them.
There are many other protections afforded to consumers by the FCRA, but some argue it falls short of helping consumers to establish or rebuild their credit. The reason is that the entire credit reporting system is voluntary.
Voluntary System
The FCRA does not require any lender or service provider to report information to the credit bureaus. That’s why you generally don’t see things like rent or utilities on consumer credit reports. And, even in the lending environment, there’s no requirement that any lender must report your account or accounts to any or all of the credit bureaus. And while I’m not criticizing the Act’s silence on this issue, unknowing consumers may think they’re building credit by paying rent and utilities when they really aren’t.
Even in the world of authorized user tradelines, a common and effective method of building or rebuilding credit reports and credit scores, there are some card issuers that do not report to the credit reporting agencies. There’s no obligation in the FCRA for issuers to do so. As such, it’s important that if you’re being added as an authorized user to someone’s credit card that you do so with an issuer that does, in fact, report to the credit reporting agencies.
The Card Act
Let’s get something on the record…I really don’t like the CARD Act. The Card Act is the statute that makes it illegal for credit card issuers to grant credit to a consumer who is under 21 unless they have a job or a co-signer. The same consumer can get themselves into five or six figures of student loan debt, but they can’t open a credit card.
Additionally, many large credit card issuers don’t allow co-signers any longer. As such, the “co-signer” exclusion to the under-21 restriction of the CARD Act isn’t even an exclusion any longer, unless you want to limit your credit card options. Further, the under-21 rule also seems to suggest when someone turns 21 their financial or employment situation will immediately change, which isn’t a guarantee and certainly not tied to an age.
Those who are under 21 can still begin to build credit using the authorized user strategy.
The under-21 restriction also puts everyone who doesn’t have a job or a co-signer three years behind the curve as to building their credit reports. Before the CARD Act, someone as young as 18 could have opened credit accounts in their name, no problem. This eventually served them well as they would start building credit at an earlier age.
Authorized Users Are Still A Good Option
The one way around all of this statute silliness is the authorized user strategy. There is no restriction to being added as an authorized user to a credit card, regardless of your age. As such, people who are under 21 can still begin to build credit, improve their credit scores, and enjoy the benefits of using plastic.
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group and the author of four books about consumer credit. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has 27+ years of experience in the consumer credit industry, has served as a credit expert witness in more than 370 lawsuits, and has been qualified to testify in both Federal and State courts on the topic of consumer credit. John serves as a guest lecturer at The University of Georgia and Emory University’s School of Law.
Disclaimer: The views and opinions expressed in this article are those of the author John Ulzheimer and do not necessarily reflect the official policy or position of Tradeline Supply Company, LLC.
Buying authorized user tradelines is an investment in your financial future. Make sure you are getting the most out of your tradelines by asking yourself the following questions first.
1. What is my average age of accounts?
Age is one of the most important factors in your credit history, so it is important to understand what your own average age of accounts is and how that metric could be impacting your credit. It will also play a role in determining which tradelines you should add to your account.
Calculating your average age of accounts is easy. Just add together the ages of all of your revolving accounts (e.g. credit cards) and divide this total by the number of accounts.
For example, let’s say we have four accounts and their ages are 2 years, 4 years, 5.5 years, and 6 months. Here’s how we calculate the average age of accounts: 2 years + 4 years + 5.5 years + 0.5 years = 12 years / 4 accounts = 3 years average age of accounts.
You don’t even have to do the math yourself if you use our Tradeline Calculator. Just put your information into the calculator and let it do the work for you.
Use our tradeline calculator to find your average age of accounts and utilization ratios.
Not sure how old your accounts are? You can pull your own credit report for free (without hurting your score) on websites like Credit Karma.
2. What is my utilization ratio?
Your utilization ratio, or the ratio of the debt you owe to the total credit limit of all your revolving accounts, is another important influence on your credit score to be aware of. Your utilization contributes about 30% of your credit score, so high utilization can drag down credit, even after tradelines are added. Therefore, it’s important to calculate your utilization ratio before buying tradelines.
Here’s how to do it: add up all of the debts you owe on your revolving accounts and then add up all of the credit limits of each of your revolving accounts. Take the total amount that you owe and divide it by your total credit limit to get your ratio.
If you’re not a big fan of math, you can check your utilization ratio and find out how adding new tradelines might affect it using our Tradeline Calculator.
If you have credit cards with high utilization, paying down the balances might be a good investment.
3. Do I have any credit cards with high utilization that should be paid off?
Even if your overall utilization is relatively low, individual credit cards with high utilization can still hurt your credit. Adding a tradeline can affect your overall utilization as described above, but will not solve the problem of having one or more cards with high utilization individually.
If you can easily pay down your balances to get the utilization to be 20% or lower, that would be money well spent, because you are lowering your utilization ratios to a level that is considered to be better for your credit.
On the other hand, if the amount that you owe is quite large and you are not in a position to significantly lower your utilization right away, then perhaps getting a couple of high limit tradelines may be the easier route to go.
Either way, utilization ratios are very important and should be taken into consideration when buying tradelines.
A credit freeze or fraud alert will prevent new tradelines from posting to your credit report.
4. Do I have a credit freeze or fraud alert on my credit report?
A credit freeze or fraud alert will block access your credit file, which prevents any new information from being added to your credit report. Therefore, if you have placed a credit freeze or fraud alert on your credit file, new tradelines will not post.
Be sure to check whether you have a fraud alert or credit freeze before purchasing a tradeline and contact the credit bureaus to remove it if necessary.
5. What is my priority: age or credit limit?
While the length of credit history only makes up about 15% of a score, age also goes hand-in-hand with payment history, which is the most valuable factor in credit scoring. The more age an account has, the more time it has had to accumulate a positive or negative payment history.
All of our tradelines have a perfect payment history, and together, age and payment history make up 50% of a credit score. Therefore, we believe it is better to prioritize age in most circumstances.
However, there are some cases in which people choose to prioritize the credit limit of a tradeline over its age. Be sure to carefully consider your personal situation and what is most important to you.
6. What are the credit limits of the AU tradelines?
If you are buying tradelines from a reputable business, the tradelines should all be from reliable banks, have perfect payment histories, and have low utilization. Since these factors are going to be about the same for each card, the two main things to consider when choosing tradelines are age and credit limit.
The credit limit factor is important because it can affect your overall utilization ratio. While individual cards with high utilization can still have a negative impact on your credit, getting your overall utilization as low as possible can still be very beneficial.
Additionally, depending on your goals, the credit limit can be an important factor if you are trying to establish a history of higher-limit accounts in your credit file.
7. How old are the tradelines?
As we stated previously, the age of a tradeline is extremely valuable, and in most cases, it is more important than the credit limit. This is because a seasoned tradeline will contribute not only to your length of credit history but also add a long period of a perfect payment record.
As we said earlier, these two categories together make up half of your score, far outweighing the other categories. Therefore, a good general rule of thumb is to buy the oldest tradelines your budget allows for.
Another reason you want to go for older tradelines is that tradelines that do not have sufficient age can actually hurt your score by decreasing your average age of accounts.
If your average age of accounts is 3 years, for example, your tradeline should be a minimum of 4 years old, but ideally much higher than that if the goal is to see a significant difference. If you buy a tradeline that is only 2 years old, your average age of accounts will decrease, which could damage your credit score. This is why it’s critical to do the calculations using our Tradeline Calculator before making a purchase.
To determine which tradelines to buy, you will need to think about age as well as the credit limit. Photo via Hloom.com.
8. Which tradelines should I buy? How do I choose the right tradelines?
Once you have determined what your priorities are, you will be better prepared to choose the right tradelines for you. If you want to increase your average age of accounts or extend the age of your oldest account, go for the older tradelines.
If you are more focused on credit limit or your overall utilization ratio, check out our higher-limit tradelines.
You can view the tradelines we have available and sort the list by age and credit limit on our updated tradeline list. For more guidance on choosing the best tradelines, read our buyer’s guide to tradelines.
9. Do the tradelines have perfect payment histories?
Payment history makes up 35% of a credit score, making it the most important component. It is crucial that any tradelines you add have a perfect payment history, because even one missed payment can do serious damage to your credit. All of our tradelines are guaranteed to have a spotless payment history.
10. Are the tradelines substantially better than what I already have in my file?
Obviously, a tradeline will only be effective for you if it is superior to the other tradelines that are already in your credit file. The safest bet is to look for one that is significantly higher in age and/or credit limit than the accounts that you already have in order to affect your averages as much as possible.
Keep in mind the reporting date and the purchase by date when buying tradelines.
It is difficult to affect an average, especially when there are already several accounts in your credit file, so adding a tradeline that is only marginally better than your existing tradelines may not have the desired effect. Make sure to invest in a high-quality tradeline that has real potential for results rather than just adding more of what you already have.
11. When is the reporting period and when is the purchase by date?
The reporting period of a tradeline is when the bank reports the tradeline to the credit bureaus, which is usually around the same time each billing cycle, with some fluctuation. You should see any new tradelines you purchased on your credit report once their respective reporting periods have passed.
Since processing payments and adding authorized users takes time, there is a “purchase by” date that tradelines must be purchased before if you want them to report in the upcoming reporting period. You can still purchase tradelines after their purchase by date, but keep in mind that they may not post until the next reporting period.
Our tradeline list provides the reporting period and the corresponding purchase by date for each of our tradelines. Be sure to keep these dates in mind when making your purchase.
12. Which banks are the tradelines from?
The bank that the tradeline is from is important because many banks do not accurately report authorized user data to the credit bureaus. The tradeline needs to come from a bank that has proven to report AU data reliably in order to be sure the tradeline has the best chance of posting.
With Tradeline Supply Company, LLC, you do not have to worry about choosing the right banks, because all of the banks we work with have been proven to report reliably to all three major credit bureaus.
However, there is one exception: if you have any outstanding collections or if you have filed bankruptcy with a certain bank, this can prevent your tradelines from posting successfully, so you will want to avoid purchasing tradelines from that bank.
Depending on your situation, you may need multiple tradelines, but in other situations, just one may be enough.
13. How many tradelines do I need?
Since everyone’s credit file is complex and unique to their situation, it can be difficult to know whether it is best to buy multiple tradelines or one very high-quality tradeline. If there are budget constraints, it is usually most effective to purchase one premium tradeline rather than multiple tradelines that are less powerful.
However, there are other situations in which multiple tradelines might be a better choice.
Just remember that the power of tradelines is always going to be relative to your current credit file. If you are not sure how many tradelines you may need, our article, “Buying Tradelines: How Many Tradelines Do I Need?” can help guide your decision.
14. Does the tradeline company use address merging or work with CPNs?
Watch out for companies engaging in address merging or other types of fraud.
Many tradeline companies tell their customers to claim the same address as the primary account holders of the tradelines, even though they do not live there, in order to increase the likelihood of the tradelines posting. Essentially, they are asking their customers to commit fraud and lie about their address.
This illegal tactic is commonly known as “address merging.” If a tradeline company does address merging, all parties involved could be implicated in fraud, so savvy authorized users will want to avoid these unscrupulous companies.
Similarly, companies often sell tradelines for “credit profile numbers” or “credit privacy numbers,” known as CPNs. We have written at length about the dangers of CPNs, but to summarize, using a CPN instead of your real social security number to apply for credit is identity fraud and a felony offense.
Beyond that, so-called CPNs are often SSNs stolen from other people, especially children, which means these companies are involved not only in fraud but also identity theft.
Clearly, a company that is committing fraud by merging addresses or working with CPNs is not one you want to do business with.
15. Do I trust the company providing the tradelines?
The most important part of the process of buying tradelines is being able to trust the company you are working with. After all, you want to be sure you won’t get stuck with tradelines that are low-quality, are overpriced, or don’t post well. Plus, you want to be certain your tradeline company provides secure online transactions and takes extensive measures to prevent fraud. Watch out for unethical and unprofessional tradeline companies, and make sure to choose one that you trust and that will treat you with integrity and respect.
15. When will my tradelines post?
Make sure to choose a tradeline company that acts with integrity.
Some tradeline companies say that it could take up to 60 days for your tradelines to report. If you don’t want to wait two months for your tradelines to show up on your credit file, we can get tradelines to post in as few as 11 days, and sometimes even sooner than that.
15. How long will I stay on the tradeline?
Some tradeline companies only keep AUs on their tradelines for a single reporting cycle. This doesn’t give you very much time to accomplish your goals.
Generally, it’s best if you can stay on the tradeline for at least two reporting cycles, which should allow you enough time to accomplish your goals. If you think you might need additional time on the tradeline, ask whether the company offers extensions.
Check what the company’s policy is, and remember that if their standard is just one cycle, keep in mind that you’d have to double the price in order to be on par with companies that keep AUs on for two reporting cycles.
16. What steps can I take to ensure that my tradelines have the best chance of posting?
To minimize the chances of a non-posting occurring, make sure to take the following steps:
Remove all fraud alerts, credit freezes, and credit locks from your credit report, since these block new information from being added to your credit file and therefore prevent tradelines from posting. Purchase your tradeline no later than the purchase by date shown on our tradeline list. Consider buying multiple tradelines as a precautionary measure to hedge against potential non-postings. Only buy tradelines from companies that have high posting success rates and a money-back posting guarantee. Do not buy tradelines from banks that you have outstanding collection accounts with or have declared bankruptcy with, since you may be blacklisted from working with that bank again. Use the correct address that you have on file with the credit bureaus so that your identity can be cross-verified with your credit file. Do not work with companies that conduct “address merging,” which is a form of fraud. Double-check your order and payment information for accuracy. Typos in your personal information can cause a non-posting and incorrect bank account information can delay payment processing and therefore can delay the tradeline from posting.
In the world of consumer credit, there are a number of Federal laws or “statutes” which help consumers in regards to their personal credit. Two such notable statutes are the Fair Credit Reporting Act, more commonly referred to as the “FCRA”, and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, more commonly referred to as the “CARD Act.”
