Is It Legal to Buy Tradelines? (2024)

FAQs

Is buying tradelines legit? ›

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

Buying a tradeline is sometimes presented as a credit repair strategy. It involves paying a third-party service to add you to another person's tradeline, so that their tradeline information appears on your credit report, represented as your own.

Even though it's not explicitly illegal, buying tradelines may be considered deceptive by lenders, and you could be in danger of committing fraud if you use the tradeline to misrepresent your creditworthiness.

Positive Impact: Tradelines with a positive payment history on accounts in good standing can be beneficial. They can Increase the number of credit lines you have, which factors into your credit mix (10% of your score). Lengthen your credit history, especially if the tradelines are seasoned accounts (15% of your score).

But lenders also look at your tradelines when reviewing your credit application. For instance, if you have a high balance on a credit card, a lender will note your credit limit to determine your credit utilization.

The cost of tradelines can range from several hundred dollars to several thousand dollars. Pricing may vary depending on how long the account has been opened and the size of the credit limit, as well as how many you purchase.

There is always a risk of bank fraud when dealing with financial transactions. In selling tradelines, if an authorized user engages in fraudulent activities. It could reflect on the primary account holder and impact their credit score.

If you are looking for a loan from the Federal Housing Authority (FHA), you will need at least two open tradelines in your credit mix. Conventional loans typically necessitate having at least three tradelines.

While Tradeline Supply Company, LLC cannot provide legal advice, we can refer to several sources that postulate the legality of buying and selling authorized user tradelines. While tradelines are not illegal, historically, they have not been accessible to everyone.

How long does a tradeline stay on your credit? ›

Every tradeline will be included in your report for at least seven years, and possibly longer. Fortunately, positive tradelines stay longer than negative tradelines. As long as any account is open and active, the tradeline will stay on your credit report.

Piggybacking is not illegal. In fact, under the Equal Credit Opportunity Act, Congress determined that authorized users cannot be denied on existing credit accounts. This rule applies even if the person being authorized is a stranger.

Having a good credit score is incredibly important — but so is the way you built it. A rough rule of thumb: You will need 3 open tradelines to qualify for a conventional loan.

As mentioned, an 554 credit score is generally considered to be a poor credit rating. Depending on your other qualifications, such as income and employment, you may be able to qualify for certain types of loans (more on that in a bit).

The minimum number of trade lines most lenders find acceptable is 4 open and active trade lines.

An important financial term that is often overlooked is the "tradeline." A tradeline simply means that you have an open line of credit that has been active within the past 1 to 2 years. If you are looking for a loan from the Federal Housing Authority (FHA), you will need at least two open tradelines in your credit mix.