Watch Out for These Tradeline Myths

Tradelines are often the subject of rumors, myths, and inaccuracies. Since we aim to educate consumers on how tradelines work and how the credit system works, we want to dispel some of these common myths about tradelines.

1. Tradelines Are Illegal

Many people immediately discount the idea of using tradelines because they believe the common but misguided myth that tradelines are not legitimate or legal to use.

The reason this myth exists is that FICO stated in 2008 that the FICO 9 credit score would eliminate the benefits of authorized user tradelines for credit piggybackers by somehow distinguishing between “real” authorized users and those who want to use AU tradelines to build their credit profile.

However, the Equal Credit Opportunity Act (ECOA) prevents this kind of credit discrimination, and FICO admitted to Congress that this action would illegally violate ECOA. As a consequence, FICO was forced to reverse its decision.

It seems that many people assumed that since the issue of tradelines went all the way to Congress, they must have been banned, but that is not the case. On the contrary, Congress actually protected the ability of consumers to use authorized user tradelines.

As further evidence, the banks themselves actually promote the practice of becoming an authorized user for the specific purpose of boosting your credit score.

You can see this for yourself if you go to any major bank’s website and search for “authorized user.”

The Equal Credit Opportunity Act prohibits credit discrimination and helps protect authorized users tradelines.

2. Tradelines Don’t Work Anymore

This is another myth that originally arose from the FICO controversy in 2008. Since FICO claimed that their new credit scoring model would be able to differentiate between traditional authorized users and those trying to “game the system,” many people assumed that this meant AU tradelines wouldn’t work anymore.

However, as we discussed above, FICO was not legally able to go through with this plan, which means anyone can still take advantage of the benefits of being a credit card authorized user.

ECOA protects authorized users from being discriminated against, so AU tradelines are here to stay.

What About FICO 10?

Now that the new set of FICO scoring models has been introduced, FICO 10 and FICO 10 T, there has been renewed interest in the question of whether tradelines are still effective.

The “T” in FICO 10 T stands for trended data, which refers to the fact that this version of the credit score will be able to look back in time at the past 24 to 30 months of your credit history. The trends in your credit profile, i.e. whether your credit has been improving or worsening, will now have an impact on your score.

This is in contrast to most credit scoring models up until now, which simply look at a “snapshot” of your most recently reported credit information.

Experian states that the types of trended data used in FICO 10 include your credit card balances, the amounts of your required minimum payments, and the amounts you paid on those credit cards. This is the reason why folks are worried about the potential impact of FICO 10 on the tradeline industry.

People are assuming that trended data is bad news for tradelines because the scoring algorithm is looking at information in the past 24 to 30 months of credit history, when the balance of a tradeline may have been higher. 

However, as we mentioned in our FICO 10 article, trended data is not likely to be a negative factor of tradelines but rather a positive. All tradelines that participate in a tradeline program should have a utilization ratio of 15% or less at all times. This is one of our guarantees at Tradeline Supply Company, LLC. Most of our tradelines typically have a very small balance or no balance at all.

With that being given, if a tradeline previously had a higher balance before being enrolled in the program, its balance has since decreased, which is a downward trend. A downward trend in the balance would be seen as a good thing by FICO 10.

Finally, keep in mind that FICO 10 is not being used by anyone yet. The credit industry is slow to adopt new tools and procedures. Several industries rely on FICO scores that are literally decades old. It’s likely that you still have at least a few years before you have to worry about your FICO 10 T score—but since it can look back into the past two years of your credit history, you may want to start preparing for it now by maintaining good credit habits.

If you are not convinced that tradelines still work, we recommend reading our articles, “Do Tradelines Still Work in 2023?” and “FICO 10: What You Need to Know About the New Credit Score.”

Video: Are AU Tradelines Still Effective in FICO 10 and 10 T Scores?

See what credit expert John Ulzheimer has to say about the effectiveness of tradelines with FICO 10 and FICO 10 T. Then check out more of our Credit Countdown videos!

3. Tradelines Are Unethical

Some people think that it is unethical to buy or sell tradelines because they believe that people who buy tradelines are artificially boosting their credit scores. But is it unethical to try to boost one’s credit score using legally allowable methods?

People take actions to try to increase their credit scores every day, such as asking for credit limit increases, taking out new loans to establish more lines of credit, asking their banks to forgive late payments, paying down credit card balances multiple times a month to keep the utilization ratio low, and many other types of credit-boosting hacks.

Becoming an authorized user for the purpose of building credit is just one of many common methods that people use to try to improve their credit.

You have probably even tried several of these techniques yourself. Therefore, it seems that the majority of people do not believe that it is unethical to try to manipulate credit scores within the limits of the law.

Studies have shown that about a third of people who have credit records have authorized user accounts in their credit profiles. In addition, those authorized user accounts tend to be superior tradelines compared to the primary accounts in their own name.

From this information, we can conclude that about a third of people who use credit are already benefiting from credit piggybacking.

However, the benefits of authorized user accounts are not equally distributed in our society. As we reported in “What Happened to Equal Credit Opportunity for All?”, it is much more common for White consumers to have authorized user tradelines compared to Black consumers.

Not only that, but Black consumers who do have authorized user accounts in their credit profile tend to benefit less from those accounts than White consumers who have authorized user tradelines.

Creating a marketplace where affordable tradelines can be bought and sold helps to create more equal credit opportunity for those who have historically been disadvantaged by an unfair system.

If you are interested in an extended discussion on this topic, check out “The Ethics of Tradelines” and “What Happened to Equal Credit Opportunity for All?”

4. Tradelines Are Expensive

One of the common complaints about tradelines is that they are expensive. Historically, it is true that tradelines were primarily available to the wealthy and privileged due to their high cost.

That may still be true for a lot of tradeline companies, but Tradeline Supply Company, LLC has been a leader in revolutionizing the tradeline industry and making tradelines affordable for everyone.

Our fully automated online platform allows us to keep costs down and provide fairly priced tradelines to consumers.

Our tradelines range in prices depending on the age of the tradeline. Our inventory of thousands of tradelines means virtually everyone can find tradelines that fit their needs as well as their budget.

We have also helped contribute to lower pricing in the industry as a whole. Other companies have started to follow our lead and lower their prices to stay competitive.

All of this means that tradelines are now more affordable than ever.

5. Primary Tradelines Are Better Than Authorized User Tradelines

People often assume that primary tradelines are superior to authorized user tradelines. They think that since authorized users are not legally liable for a credit account, primary tradelines must be more powerful, but this belief is somewhat misguided.

When it comes to building credit, the ultimate goal is to open your own primary accounts and maintain a positive history on those accounts, so in this sense, primary tradelines are a necessity.

However, when it comes to buying tradelines, trying to buy a primary tradeline is generally not a good idea. Firstly, the primary tradeline industry is full of scams and questionable practices, some of which may even be illegal.

If you think about it, it doesn’t really make sense to try to “buy” a credit account that, by definition, is supposed to have been issued to you by the creditor. If the account was not issued to you, that means someone else had to have opened that account in their name at some point, so how does it then become your primary tradeline?

Secondly, purchasing a primary tradeline may not even help achieve your goals as much as you might think. A legitimate primary tradeline will have no age and no payment history associated with it and will probably have a low limit as well.

In contrast, you can legitimately purchase authorized user tradelines that have lots of age and perfect payment history in addition to high credit limits.

Which option do you think would be better for your credit: the brand-new account with a low limit, or a seasoned AU tradeline with a high credit limit? In general, the seasoned authorized user tradeline is going to be the better choice.

6. Tradelines Are an Alternative to Credit Repair

While tradelines and credit repair are often used together, they are not the same thing, and it’s important to understand the difference.

An easy way to think about the distinction between tradelines and credit repair is that tradelines add information to your credit report, while credit repair removes inaccurate information from your credit report.

If your credit report has damaging errors that are lowering your score, any tradelines you add will be limited in their power. For this reason, you may want to undergo credit repair before or in tandem with tradelines.

Similarly, tradelines should not be used as a substitute for credit repair. While they can help to balance out derogatory accounts, this is not the same thing as cleaning up errors in your credit report.

The best results for your credit can be obtained by using both credit repair and tradelines together.

7. I Can’t Get Tradelines That Were Opened Before My 18th Birthday

Some people believe that you cannot or should not buy tradelines that were opened before you turned 18 years old.

The theory seems to be that it would look suspicious if you were to have an authorized user tradeline while under the age of 18, so somehow the tradeline wouldn’t count toward your credit history.

Contrary to this myth, you do not have to buy tradelines that were opened after your 18th birthday.

In reality, there are many examples to show that this is not true. Parents often add their children as authorized users of their credit cards well before age 18, whether they allow their children to actually use the credit cards or they just want to help their children build a credit history from a young age.

Imagine this hypothetical example: let’s say you are 16 years old. Your father has a credit card that has been open for 20 years. He wants you to be able to use the credit card in case of emergencies, so he adds you as an authorized user to his 20-year-old account. In this case, the tradeline actually extends back to before you were born, but that does not prohibit you from being an authorized user on the account.

Of course, there may be exceptions to this rule, since different banks may have different policies as to the minimum age of authorized users.

However, if you are over the age of 18 and buying tradelines, it should not matter how old the tradeline is.

8. Tradelines Are Only a Temporary Solution

While it is true that a tradeline will typically only report as an open account on your credit report for two reporting cycles, this does not mean that tradelines are only a temporary solution.

Although tradelines report as open accounts for two months, they remain on your credit report as part of your permanent credit history.

Once you are removed from the tradeline, the account will then show as closed, and the closed account will remain on your credit report as part of your permanent credit history for as long as the bank continues to report it.

Although closed accounts are assumed to weigh less on your credit score than open accounts, since the closed tradeline is still a part of your credit history, it will likely still factor into your credit score.

9. The Credit Limit Is More Important Than Age

Between the two most important factors to consider when choosing a tradeline—age and credit limit—we usually recommend prioritizing getting as much age as possible, because age is the most powerful factor of a tradeline. Of course, this depends on what your goals are, but in most cases, the age of a tradeline is more valuable than the credit limit.

This is because age goes hand-in-hand with payment history, together making up 50% of a credit score. When it comes to the length of your credit history, more is always better.

10. Buying a Tradeline Guarantees a Score Increase

Those looking to improve their credit score sometimes mistakenly assume that they can go out and buy any tradeline and get a guaranteed credit score boost. This is a dangerous myth because if buyers are not educated and choose the wrong tradeline for their specific credit situation, buying a tradeline could actually backfire and hurt their credit.

To make sure you don’t fall into this trap, we recommend reading “How to Choose a Tradeline,” “Common Mistakes Made When Buying Tradelines,” and “The #1 Secret on How to Unlock the Power of Tradelines.”