Unless you’re a crime lord, you may be looking for legal ways to better your credit score. The answer may be tradelines.
You may be asking if this is legal. We get that buying tradelines may seem too good to be true, but it is most definitely true.
Keep reading to learn the basics about tradelines and how something so good can still be legal
What Are Tradelines?
A tradeline is a credit account that appears on your credit report. Every account that you have that build credit (like credit cards or loans) shows up as a tradeline on your report.
Many people perceive tradelines as sneaky tricks against lenders, but there is more you should know before taking their word for it.
How Do I Buy Tradelines?
Some people ask family members to add their names as authorized users to their credit card accounts, phone bills, or other credit-affecting accounts. This may be similar to buying tradelines, but it is not the same.
When you’re buying a tradeline, you don’t know the person who is adding you as an authorized user. You are also paying for that person to add you as such on their account(s).
You can buy tradelines through third-party services that may charge anything up to thousands of dollars.
How Is Buying Tradelines Legal?
While it may be considered immoral, having tradelines that aren’t primarily yours on your credit account is not illegal. There are authorized user tradelines you can use.
Family members can legally add their relatives to their credit accounts, but some people don’t have family members to do this. For example, parents can legally add their children to their credit accounts, but some people don’t have parents that did this for them.
Many people claim that buying tradelines is a way for those without the head-start from their parents to catch up. However, buying tradelines can get you in trouble.
The point of building your credit score is to help banks and similar entities determine whether or not they should lend you money. If you’re adding your name to someone else’s account, you’re not technically the one building the credit.
We should also mention that sharing your credit information with those you don’t know can be dangerous.
The bigger question may be if buying tradelines is moral or not rather than if it is legal or not. Some people believe that the practice is unacceptable while others see it as a way of beating the system.
For those who do consider the practice to be acceptable, you should take into account the FICO Score 8 model. In 2009, this model made the effect of buying tradelines has severely dampened.
Addressing Your Credit Score
Placing another person’s name on your credit account is not a completely foreign practice. The idea applies to children and adults alike.
Whether you choosing to get tradelines from your family or others, they are technically legal and can be helpful for your credit score. We simply caution you to be careful and choose carefully.
For more finance tips, feel free to read more from our blog.