Credit Repair vs. Tradelines [Infographic]

Perhaps the title “Credit Repair vs Tradelines” is not entirely accurate, but this is a common way that many consumers think of the two industries and even many credit repair companies as well. In truth, as our infographic illustrates, the two services really go hand-in-hand.

However, there are several differences that we will highlight in order to understand the full range of credit-related options. Be sure to check out our article below the infographic for all the details.

Credit Repair & Tradelines Infographic

What Is Credit Repair?

The term “credit repair” can have different definitions depending on who you ask. Generally, however, credit repair is considered to be the process of mending poor credit that is a result of errors in your credit report or identity theft. This is accomplished by disputing inaccurate information in your credit file with the credit bureaus, who will investigate the claim and take appropriate action.

For example, if you have collections on your credit report that are being reported with inaccurate information, you can dispute the collection account and have it updated or removed from your credit report.

Sometimes people also use the term credit repair to mean fixing bad credit in general, using traditional methods such as bringing all accounts current and paying down debts.

For those who are seeking credit repair services through a company, you are probably interested in the process of repairing bad credit by disputing inaccurate negative information in your credit file. If your credit score is lower than the average range, going to a credit repair business may seem like an appealing option.

However, keep in mind that credit repair has its limitations. Since credit repair services focus on removing information from your credit file, once that is accomplished, there may not be much left in your file to show that you have a credit history at all. This is especially true of questionable credit repair companies who use dishonest methods to aggressively “sweep” your credit file of legitimate information.

In order to truly improve your credit score, it is important not only to remove inaccurate negative information but to also work on rebuilding your credit.

Filled-in crossword puzzle repaired with white-out. Repair credit by removing errors from your credit report.

Credit repair focuses on removing inaccurate information from your credit report.

Tradelines vs. Credit Repair: What’s the Difference?
Addition and Subtraction

As we discussed above, credit repair can be thought of as the process of removing negative information from your credit report. In contrast, tradelines add information to your credit report.

A tradeline is simply any account in your credit file, so adding tradelines by definition bulks up your file. This can be helpful for people with short or thin credit histories, or those who are recovering from a period of bad credit and trying to rebuild their credit.

A short credit history means the age of your credit file is not very long, while a thin credit history means you have only a few accounts in your credit profile, if any. Credit scoring models factor in both the length of your credit history and your mix of credit, so having a thin or short credit file will likely result in a lower credit score rating.

Being added as an authorized user to tradelines that are in good standing and have a higher age (known as “seasoned” tradelines) could improve both of these factors by increasing your length of credit history and diversifying your mix of accounts.

In addition, seasoned tradelines for sale from a reputable company will have perfect payment histories and relatively low utilization ratios, which impact important components of your credit.

Alarm clock on desk showing tradelines can post quickly

Tradelines can post to your report quickly, while the credit repair process may take longer.

How Long Does Credit Repair Take to See Results?

The credit repair process typically takes 1-6 months or longer, depending on how many disputes you need to make. Once you submit your disputes to the credit bureaus, they have 30 days to research the dispute and 5 more days to respond once they have completed the investigation. Sometimes, additional information may be needed, which can add more time to the process.

If you have a lot of errors to dispute, you may have to submit them a few at a time, which is why getting results can take several months.

Tradelines, however, can post to your credit report in as few as 11 days, and sometimes even faster. It just depends on the reporting period of the tradeline you are adding.

How Much Does Credit Repair Cost?

The cost of credit repair services can vary widely depending on the company, which services you need, and how long the process takes. Many credit repair organizations charge a monthly fee for their work in addition to an initial fee for pulling your credit reports. Typically, the monthly fees range between $60 to about $100 per month for basic credit repair services. [Disclosure: This article contains affiliate links.]

Purchasing tradelines, on the other hand, usually involves paying a one-time fee (unless you choose to extend the tradeline for additional time).

Is Credit Repair Worth It?

If you have bad credit, paying for a credit repair service is an option that you may want to consider, especially if you have a lot of errors on your credit report or if you have been the victim of identity theft and you need some help disputing fraudulent accounts.

If you do decide to hire a credit repair service to help you clean up your credit, make sure you research each company thoroughly and choose a legit credit repair company. Unfortunately, the industry has not earned the best reputation. Be sure to know your rights laid out by the Credit Repair Organizations Act (CROA) so you can protect yourself from being taken advantage of by shady credit repair companies.

Not everyone needs the help of a credit repair company to begin with. If you have one or two simple errors on your credit report, you may feel that you will be able to go through the credit repair process on your own and have those errors successfully removed or updated.

To answer the question of whether paying for credit repair is worth it, you’ll have to take a look at your credit report and decide whether the damage is extensive enough to warrant hiring a professional credit repair service or whether you want to try DIY credit repair.

How Credit Repair and Tradelines Work Together to Fix Your Credit

Credit repair and tradelines naturally go hand-in-hand. In one sense, tradelines pick up right where credit repair ends. Again, credit repair helps to “clean up” credit and tradelines help build or re-establish positive credit history.

One really should not exist without the other; the two techniques are most effective if done in tandem. Since credit repair removes information from your credit file, it may be necessary to add positive information to your file in the form of tradelines in order to truly rebuild your credit.

Boy and man building a house. Tradelines can help to build credit.

Tradelines can help to build or rebuild credit.

Buy Tradelines or Fix My Credit: Which Should I Do First?

It does not necessarily matter which one comes first. Both can exist at the same time.

However, if you have bad credit due to inaccurate derogatory information on your credit report, those variables will have an impact on your overall credit picture and could lead to tradelines having a diminished effect. In this case, the most effective course of action would be to repair your credit before adding tradelines.

On the other hand, it is never a bad time to have good things on your credit report. The timing of which strategy should come first ultimately depends on your individual situation and your own timeline.

For example, some credit repair programs take quite some time to accomplish. As we mentioned, is not uncommon for certain credit repair programs to take many months to complete. In these cases, tradelines may fit in at any given time during the credit repair process.

Woman looking at financial data on tablet screen. Tradelines and credit repair work best together.

Credit repair and tradelines work best when used together as part of your overall credit strategy.

Why Don’t All Credit Repair Companies Offer Tradelines?

Surprisingly, not all credit repair companies sell tradelines or even know about tradelines. Sometimes tradeline companies are seen as competition to credit repair businesses because clients may end up spending money on tradelines as opposed to credit repair services.

However, as we have seen, credit repair works best when paired with tradelines. The best credit repair companies will provide you with all of the information and options that you need to make an informed decision about your financial future.

Conclusion

While tradelines and credit repair can both be effective in improving your credit, they are not the same thing. Rather, they are complementary strategies that work best when used together.

Don’t mistake tradelines for credit repair—think of tradelines as a way to build or re-establish credit. The best course of action for your credit is to evaluate your own unique situation and ask how tradelines can complement your credit repair strategy.

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What Is a Credit Freeze on My Credit Report?

What Is a Credit Freeze - PinterestIf you’ve been paying attention to the world of credit, you’ve probably heard a lot about credit freezes lately. A credit freeze can be a valuable tool for those who may be concerned about identity theft. However, many people are unaware of how credit freezes works and how to use them.

What is a credit freeze and how does it work? How do you place a freeze on your credit report? Is a credit freeze worth it? Keep reading for the answers to these questions and more.

What Does a Credit Freeze Do?

What a credit freeze does is it blocks lenders and business from accessing your credit file without your consent. This helps to prevent identity theft in the case of a criminal trying to open a fraudulent credit account in your name.

However, a credit freeze does not block access for all businesses; rather, it only pertains to companies with which you do not have an existing relationship. Lenders that you currently have a relationship with can still access your credit file, such as your credit card issuers, your auto lender, etc.

In addition, if you have an account in collections and your lender hires a collection agency, the collection agency can also view your credit report.

A credit freeze also does not prevent you from accessing your own credit report, including your free annual credit report from each credit reporting agency.

Who Should Do a Credit Freeze?
If you receive any bills that are in your name but do not belong to you, that is a sign of possible fraudulent activity.

If you receive any bills that are in your name but do not belong to you, that is a sign of possible fraudulent activity.

You may want to consider freezing your credit if you have been a victim of identity theft or suspect you may be a victim of identity theft.

Here are some signs of potentially fraudulent activity in your name that Experian says to watch out for:

You have received bills in your name or letters from debt collectors for accounts that are not yours.
There are inquiries on your credit report from businesses to which you did not give your permission to pull your credit report.
You get a notice from a company that warning you that you have been affected by a data breach.
You get an alert from your bank about fraudulent activity on your account.

If any of these situations apply to you, you may have an elevated risk of becoming a victim of identity theft, which means it may be a good idea to freeze your credit.

How Does a Credit Freeze Work?
You will need to provide your PIN when you want to lift a credit freeze.

You will need to provide your PIN when you want to lift a credit freeze.

The way that credit freezes work is governed by federal law. Each of the major credit bureaus is required to provide credit freezes to consumers within a certain time frame.

If you request a security freeze online or over the phone, the law mandates that the freeze must be put in place by the next business day. When you want to lift the freeze to apply for credit, the credit bureaus must “thaw” your credit report within an hour of your request.

If you send your request to place or lift a freeze in the mail, the credit reporting agencies have up to three days after they receive your request to take the appropriate action.

When you place a credit freeze, the credit bureaus will provide you with a PIN or password. You will need this PIN or password to lift the freeze, so it’s important to store it securely. When you want to remove the freeze temporarily or permanently, you can contact the credit bureaus and provide your PIN or password and they will lift the freeze.

When it comes time to lift a freeze temporarily to apply for credit or employment, it’s worth asking which credit bureau the lender or employer is planning to pull your report from, so that you only have to lift the freeze with that specific bureau. If you are not sure which bureau they will use, you will need to contact each bureau to lift all of the freezes on your reports.

A security freeze on your credit will not prevent fraudulent activity on accounts that were compromised prior to the freeze.

A security freeze on your credit will not prevent fraudulent activity on accounts that were compromised prior to the freeze.

Will a Credit Freeze Prevent Identity Theft?

A credit freeze can certainly help reduce the risk of identity theft by preventing scammers from opening new credit accounts in your name.

However, a credit freeze will not protect you against identity theft in cases where someone has already accessed your financial information, such as if your bank account password was stolen by a hacker or exposed in a data breach.

It’s always a good idea to check your credit reports regularly to watch out for fraudulent activity, whether you have a freeze on your credit file or not. If you are concerned about identity theft, placing a security freeze on your credit may give you some additional peace of mind.

Since credit freezes are guaranteed by federal law, if someone were to open a fraudulent account in your name while your credit is frozen, you would not be held liable for the financial losses incurred.

How Long Is a Credit Freeze in Effect?

The length of time that a credit freeze stays in effect varies depending on which state you live in.

In most states, credit freezes are in place permanently until the consumer decides to lift them, whether temporarily or permanently. However, some states set automatic expiration dates for security freezes a number of years after they were originally placed.

Is a Credit Freeze Permanent In Your State?

In Kentucky, Nebraska, and Pennsylvania, credit security freezes automatically expire 7 years from the date of placement. In all other states, they are permanent until removed by the consumer.

If you want to learn more about credit freeze regulations in your state, creditcards.com has a useful resource that summarizes the laws in all 50 states.

How Much Does a Credit Freeze Cost?

Thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was passed in 2018, the credit bureaus are now required to provide free credit freezes to consumers. 

It is completely free to place a freeze on each of your credit reports. In addition, it is also free to temporarily lift the freeze and then reinstate it, which is important to do when applying for credit or buying tradelines, as we will discuss below.

How to Do a Credit Freeze

To place a security freeze on your credit file, you will need to contact each credit bureau (Equifax, Experian, TransUnion, and Innovis) and be ready to provide personal information such as your name, address, date of birth, and social security number.

Unfortunately, since the credit reporting agencies are all separate private companies, there is no integrated system in place where you can request a freeze once and have it apply to all of your credit reports. Instead, you have to work with each of the credit bureaus individually in order to place or lift a credit freeze.

Can I Place a Credit Freeze Online?

In many cases, it is possible to initiate a credit freeze online by visiting each credit bureau’s website and filling out a form. In some cases, they may ask you to send documentation verifying your identity via mail before issuing the freeze.

Some experts recommend freezing your child's credit to prevent identity theft.

Some experts recommend freezing your child’s credit to prevent identity theft.

Freezing Your Child’s Credit

Given the proliferation of synthetic identity fraud using stolen SSNs, which we talked about in our article about CPNs, many credit experts recommend freezing your child’s credit to protect them from identity theft. You don’t want to wait until your child is an adult and ready to apply for credit to find out that their credit has been ruined by a criminal that stole their identity years ago.

If you have children under the age of 16, federal law allows you to freeze their credit. Although most children do not have credit files yet, when you request a credit freeze, the bureaus will create a credit file for your child and then freeze it.

When you freeze your child’s credit report, just like when you freeze your own credit file, remember that you will need to keep the PIN in a secure place and you should be prepared to “thaw” their file when the time comes for them to apply for credit.

What’s the Difference Between a Credit Freeze, a Credit Lock, and a Fraud Alert?

While they sound similar and are often confused, a credit freeze, a credit lock, and a fraud alert are all different things.

Fraud Alerts

A fraud alert is an alert placed on your credit report that lets potential lenders know that you may have been a victim of fraud.

It is similar to a credit freeze, but instead of simply preventing lenders from seeing your credit report, it allows them to obtain a copy if they take extra steps to verify your identity and that you are the person applying for credit, such as calling you on the phone.

Like a credit freeze, a fraud alert may help to prevent fraudulent accounts being opened in your name, but cannot stop someone who already has access to your accounts. 

Unlike a credit freeze, fraud alerts are temporary. A normal fraud alert for someone who has not been the victim of identity theft lasts for one year. Victims of identity theft can get an extended fraud alert, which lasts for seven years. Those serving in the military can use an active duty military alert, which lasts one year and is renewable as long as you are deployed.

Credit locks are not governed by federal law and may come with monthly fees.

Credit locks are not governed by federal law and may come with monthly fees.

Fraud alerts are free. Conveniently, when you request a fraud alert, you only have to contact one credit bureau. That bureau must then contact the other two major bureaus and all three of them will implement a fraud alert on your respective credit reports.

Credit Locks

A credit lock is also similar to a credit freeze, but it does have some important distinctions. One of the main ways in which a credit lock differs from a credit freeze is that it is more convenient to unlock your credit than it is to lift a credit freeze.

While lifting a credit freeze requires you to provide the PIN that you were given when you placed the freeze, a credit lock can be undone in seconds and without a PIN online or using an app on your phone.

Credit locks are not covered by the federal law that regulates credit freezes and fraud alerts, so the credit bureaus are allowed to charge fees for providing credit locks. Consequently, placing a lock on your credit often comes with monthly fees.

In addition, a credit lock is simply a business arrangement between you and the credit bureaus and is not regulated by federal law. Therefore, the credit bureaus can’t necessarily be held responsible if someone does manage to fraudulently open an account in your name while you have a credit lock in place.

Some credit locks may come with forced arbitration agreements in the contract, meaning that if you have a dispute with the credit bureau, it must be resolved by arbitration instead of taking them to court.

Will a Credit Freeze Prevent My Tradelines from Posting?

Unfortunately, credit freezes and tradelines do not mix.

In order for your tradelines to post correctly, all credit freezes, fraud alerts, and credit locks must be lifted.

In order for your tradelines to post correctly, all credit freezes, fraud alerts, and credit locks must be lifted.

The reason for this is simply that the purpose of a credit freeze is to block anyone from accessing your credit file. This, of course, includes the banks that you may buy tradelines from.

Therefore, if you have a credit freeze placed on your file, there is a good chance that it will prevent the tradelines from posting to your credit report.

The same goes for fraud alerts and credit blocks, which also restrict access to your credit file and thus prevent tradelines from posting.

For this reason, our non-posting guarantee requires that you lift all credit freezes, credit locks, and fraud alerts before placing a tradeline order with us.

For more tips on making sure your tradelines post successfully, check out “How to Get Tradelines to Post.”

Conclusion: Is a Credit Freeze a Good Idea?

A credit freeze is a tool that allows you to prevent others from accessing your credit report, which makes it harder for criminals to open fraudulent accounts in your name and thus helps to protect you from identity theft.

Placing a security freeze on your credit report is free and it does not affect your credit score, so it may be a good idea, particularly for consumers who are concerned about identity theft.

Unfortunately, the credit bureaus and banks have left themselves vulnerable to cyberattacks, and it has become commonplace for hackers to gain access to and expose the personal information of millions of consumers at a time. Therefore, virtually all savvy consumers are likely to be concerned about protecting their identity and sensitive financial information.

However, there are some things to keep in mind when considering placing a security freeze on your credit file.

Firstly, it is important to remember that you must lift a credit freeze before applying for credit. If you don’t, since the credit freeze will block the lender from accessing your file, your application could be delayed or denied altogether. You’ll need to carefully keep track of the information required to lift your credit freezes, such as a PIN or password.

Because of the hassle of unfreezing and refreezing your credit report, you might want to postpone placing a freeze on your credit if you are about to apply for a mortgage, an auto loan, or another type of new credit.

In addition, if you are planning to purchase authorized user tradelines, it is vital to remove all credit freezes, fraud alerts, and credit locks of any kind before buying tradelines, or else they will prevent your tradelines from being added to your credit report.

To summarize, a credit freeze can be a highly valuable tool in protecting your credit health—just be sure to remove any security freezes on your credit report before applying for credit or buying tradelines.

Now that you are familiar with the ins and outs of how credit freezes work, let us know what you think. Do you plan to get a credit freeze? Do you have a credit freeze in place already? Share your thoughts below!

Read more: tradelinesupply.com

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