Your credit score rating greatly affects everything you do. This includes how much you pay for a couple of insurance policies, the interest rate you’re offered on a mortgage or car loan, or if you qualify for a credit card. Because of this, it is pretty understandable why a lot of individuals look for any possibility to improve their credit score.
There are a lot of methods that you can use to boost your credit score. However, there’s one approach that people use to improve their credit scores faster. This is through purchasing tradelines.
However, before you proceed with this option, there are a couple of things you should know first.
What’s A Tradeline?
Basically, a tradeline is an account that shows up on your credit score report.
When trying to improve your credit score, one popular piece of advice is to ask a friend or family member with an excellent credit score to add you as an authorized user on their credit card account. With this, your credit score benefits from the low utilization rate, on-time payments, and long credit history of the main user.
To make things simple, purchasing a tradeline is simply you becoming an authorized user on the credit card account of another person.
Is It Legal?
There are a lot of factors to consider to understand whether purchasing tradelines is legal or not.
Though the method may not be strictly illegal, purchasing tradelines might be considered deceptive by credit reporting agencies and lenders. There’s also a possibility that you’re putting yourself at risk of committing bank fraud.
The reason for this is that lenders utilize the details included in a credit report to determine if they should loan a person money and what interest rates they’ll provide.
If purchasing a tradeline increases the low credit score of a person artificially, the lender may end up making loans to people who do not meet their qualifications.
Does It Improve Your Credit Score?
Even if it’s legal to purchase tradelines, it might not be successful for establishing an excellent credit score. This is particularly true in the long run.
In theory, there are a couple of factors that can improve your credit score. Buying tradelines can help improve these factors. So, your credit score will also increase.
- Length of Credit History
In general, you’ll have a better score if you’ve been using credit for a long period. Thus, it might be extremely difficult to improve this factor if you are new to credit.
On the other hand, you can immediately improve the age of your oldest account if you rent a decade-old tradeline. This will also increase the average age of every single account you have.
- Payment History
You can benefit from on-time payment history as long as the main user of the credit account keeps on paying their bills on time.
However, it will also impact negatively your credit score if you purchase a tradeline and the main user forgets to make a payment for the month. Because of this, it can be a bit risky.