Key Takeaways

When it comes to credit reports, tradelines refer to credit accounts such as credit cards, personal loans, and mortgages. There are two main types of tradelines: revolving tradelines like credit cards, and installment tradelines like mortgages. Tradelines contain detailed information from the creditor including balance, payment history, important dates, and more. They play a crucial role in determining a person's credit score.

Definition and Examples of a Tradeline on a Credit Report

A tradeline on a credit report represents a credit account. Credit agencies compile credit reports for individuals based on these tradelines. Each tradeline includes information provided by the creditor, such as the creditor or lender's name, partial account number, type of account, date opened, last activity date, current balance, credit limit or loan amount, last payment amount, date of last update, payment history, and current account status. There are two types of tradelines: revolving (like credit cards) and installment (like student loans or mortgages).

How a Tradeline Works

Your credit score, which measures your creditworthiness, is calculated using tradeline information from your credit report. If you have made payments on time, kept balances low, and been responsible with credit, your tradelines will show positive information leading to a high credit score. A credit score cannot be generated without tradelines. To have a credit score, your credit report must have at least one tradeline active in the past six months.

How Tradelines Impact Your Credit

The number of tradelines you have open can affect your credit score. Having too many can make you look overextended, while too few show a lack of credit experience. It is ideal to open and close accounts only as necessary, maintain good standing on existing accounts, and keep debt balances low to build a strong credit score.

When Tradelines Are Removed

Credit bureaus can report accurate and complete information including both positive and negative accounts. Open tradelines with positive information stay on your credit report indefinitely. Closed tradelines with positive information remain for a time set by the credit bureau, while closed tradelines with negative information are removed within seven to 10 years.

How Tradeline Information Is Collected

Creditors and lenders provide tradeline information to credit bureaus based on their agreements. This information is typically updated monthly, reflecting the recent status of each tradeline. It is essential to review your credit report annually to monitor the information reported.

Checking for Errors in Tradelines

Review your credit report thoroughly to ensure accuracy. Any errors, such as outdated or inaccurate tradelines, should be disputed with the credit bureau. Unknown tradelines could be a sign of identity theft.

Buying New Tradelines

Adding new tradelines to your credit report can help improve your score. Options include secured credit cards, store credit cards, and credit builder loans. While some companies sell access to tradelines, this practice may not always work as lenders and credit agencies view it as deceptive.