Are Tradelines Legal?
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Buying a tradeline is 100% legal. While some consider it a loophole, buying or selling tradelines is not a crime.
It’s true that tradelines are a pretty controversial topic in the world of credit. You may have stumbled across other articles questioning both the legality and the morality of tradelines. Some sources also claim that credit card companies and other creditors really frown upon tradelines.
It’s always a good practice to be wary of anything that promises to instantly boost your credit score, which products like credit repair and tradelines are sometimes marketed as. However, no source is able to definitively say that tradelines are illegal because it’s entirely legal to buy and sell tradelines, and we’ll explain why in this article.
The “Credit Piggybacking” Strategy
Tradelines make use of an underlying concept called “credit piggybacking.” This is when you become added as an authorized user to someone else’s credit account. Ideally, that credit account has a long history of positive credit, so your credit score benefits from this arrangement.
However, buying a tradeline isn’t the only form of credit piggybacking. Believe it or not, banks and credit card companies also actively promote credit piggybacking. The most common way they do this is by encouraging you to add others (usually family or friends) as authorized users to your credit cards.
For example, parents frequently add their children to their credit accounts. This is because children between ages 16 and 18 are unlikely to have any credit to their name. By adding them as authorized users to long-established accounts, they could instantly start off their credit journey with a 700 credit score or higher.
This arrangement is a win-win for both the child and the credit card company. The child could use this credit score to apply for an auto loan, for instance. The credit card company benefits because more authorized users means more usage of their products, increasing their revenue.
Why Do Credit Card Companies Frown Upon Tradelines?
As we’ve seen, it’s possible for creditors to benefit from credit piggybacking. So why do many frown upon tradelines?
For one thing, people who buy tradelines are only looking for a temporary credit boost. They are not active authorized users. An active authorized user on a credit card has potential to increase spending on the card. A person who buys a tradeline is a “passive” authorized user and doesn’t actually help credit card companies make more money because they cannot use the card to purchase anything. As a result, they’re less likely to approve of this practice.
In addition, there are certain tradeline companies out there that are suspicious. This has somewhat tainted the reputation of all tradelines in general. This isn’t an issue if you purchase a high-quality tradeline, so be sure to take your time picking one out.
Finally, many people simply think it’s better to focus on steady, long-term fixes. For instance, you may want to consider using one of the best credit repair companies in the United States to fix your credit. However, this doesn’t cancel the use of tradelines as a short-term solution, nor does it make tradelines illegal.
How Do Tradelines Work?
A tradeline is essentially a credit account and all the history and information associated with it, according to the Consumer Financial Protection Bureau. When you buy someone else’s tradeline, they are promising to add you as an authorized user for a set amount of time.
On credit reports, tradelines don’t report the date that an authorized user is added to the account. Because of this, your credit report will contain the full history of the tradeline. This can have a significant positive effect on your credit score as long as you remain an authorized user.
How Much Will a Tradeline Boost My Credit?
Tradelines vary a lot in quality. Different tradelines will have differing impacts on your credit score. A single high-quality tradeline could potentially boost your score by 50 points or even more.
Here are some factors you should consider when buying a tradeline, since these will affect how much your credit score increases:
- Account history. Obviously, the most important factor is the tradeline’s account history. The best tradelines have a flawless record, meaning that there are no missed payments.
- Credit limit. Tradelines with higher credit limits are better, since this reduces your overall credit utilization.
- Account age. The longer a tradeline has been active, the better. This is because one of the factors that determine your credit score is the average length of your credit history.
Note that you’re unlikely to find the “perfect” tradeline out there. You may have to sacrifice one of these for the other, depending on your needs. For example, if you have a relatively clean payment history but need a lower credit limit, it’s better to find a tradeline that prioritizes that.
Also, the better the tradeline, the more expensive it will be. You’ll have to determine whether your budget allows for a more high-quality tradeline.
How Long Do Tradelines Stay on Your Credit Report?
Tradelines usually stay on your credit report for two reporting cycles, or 60 days. Pay close attention to your contract, as this will contain information on exactly when you’ll be added and removed as an authorized user. Some companies will also allow you to extend your tradeline.
After your contract expires, the tradeline may not be completely removed from your credit report. In many cases, it shows up as a closed account, which is totally fine. Closed accounts do not negatively impact your credit score.
Can You Sell Tradelines?
Yes, it’s completely legal to sell tradelines and put an authorized user on your credit card. However, before you start researching how to sell tradelines, you must first have a credit account with excellent payment history.
You could then put your tradeline up for sale at a company like Tradeline Supply Company, who will pay you a commission for each sale.
The Best Company For Tradelines: Tradeline Supply Company
If you’re looking for where and how to get tradelines, look no further than Tradeline Supply Company. They have fully embraced an online business model, making it easy for anyone to get started on their website.
We like Tradeline Supply Company for the following reasons:
- Full price transparency. You don’t have to provide your personal information to see how much tradelines at Tradeline Supply Company cost.
- Affordability. Because Tradeline Supply Company is online-only, they can afford to offer lower prices across the board. You’re unlikely to find better deals elsewhere.
- Two cycle guarantee. All tradelines will be displayed as an open account on your credit report for at least two reporting cycles (60 days).
- Tradeline calculator. It can be confusing and unclear how much a tradeline will impact your credit score, but this is where the tradeline calculator comes in. The calculator can show how your average credit age and credit utilization will be affected, allowing you to pick out the best tradeline for you.
For more top recommendations, check out our article on the 5 Best Tradeline Companies.
Conclusion and Next Steps
Tradelines are 100% legal. They act as a perfect short-term solution to increasing your credit score by utilizing the credit piggybacking strategy.
If you’re looking to purchase a tradeline, stay away from questionable, low-quality ones because these are the ones that raise eyebrows. Instead, we recommend finding a high-quality tradeline at Tradeline Supply Company which will only positively benefit your credit score.
We recommend finding a high-quality tradeline at Tradeline Supply Company, which will positively benefit your credit score.
When doing research, Credit Help Info relies on credible and authoritative sites. These research sources are provided so that you can see exactly where we get our information.
About the Author
Chris Morgan is a credit expert and founder of Credit Help Info. He has been featured in Addition Financial, GOBankingRates, MSN Money, Yahoo Finance, and many other publications. He has read hundreds of books and resources on finance and the credit industry. Because he did this, you don’t have to. As a school teacher for over 20 years, Chris enjoys taking complicated material and breaking it down into manageable information that’s easy to understand.