Fixing Your Credit

Terrible credit can have an enormous impact on your life. It can be almost impossible to purchase…

Fraud Victims And Credit Reports

Consumer scam has become very widespread in recent years, becoming easier by the exploitation of …

The Role Of Credit Bureaus

Adverse Action And Credit Reports

What Is A FICO Score?

Credit Report Basics

What Is A Tradeline?

by: Sahil | last updated: October 30, 2009
Tags: Tradeline, credit report, FICO, credit, credit history, credit score, credit rating, seasoned tradeline

Guide Rating:

Your Rating:
- 1
- 2
- 3
- 4
- 5

0 comments |

Email this guide |

Print this guide

What Is A Tradeline?

A tradeline is nothing but the information that is contained in your credit report about payment history for various creditors. In other words this payment history along with other relevant information regarding your account is called a tradeline. There should be a tradeline for every creditor in your report.

The tradeline usually comprises of information such as the name of the creditor, the account number (truncated for security), the type of account, the balance owed, the date on which the account was opened, the credit limit, co-signers of the account, and the date on which the information was updated by the credit bureau.

In addition to the above information, a tradeline can indicate if there were any bankruptcies, if there has been a repossession of collateral, if an account has been charged off, and if an account has been turned to collections.

A seasoned tradeline is a line of credit that the borrower has kept open in good standing for a long period of time. Typically a long period is considered to be somewhere around at least two years. A seasoned tradeline can be used for improving the credit score of a person and has raised controversies.

In a seasoned tradeline the account holder can simply add a third party as an authorized user and not permit the third party to make any transactions on the account. This increases the credit scores of the third party since the account has been in good standing for a long period of time. Moreover the credit history appears to be long and is viewed favorably by lenders or creditors.

The risk involved to the donor is that the authorized user may use the account and may not pay back. This will result in reduction of the credit score of the primary account holder. Therefore it is advisable not to use this method to increase your credit rating if you already have a seasoned tradeline. This is an important loophole in the credit business and can be wielded to increase your credit score but is not recommended.

The legality of this remains obscure; however Fair Isaac, the company that created the FICO score has stated in 2007 that they will no longer consider accounts in which the borrower is the authorized user. This decision is logical since the authorized user is not obligated to pay the credit but the primary user has to pay in case of default by the authorized user/s.