Credit reporting companies use the word “tradeline” to describe credit accounts displayed on your credit report. There is an unique tradeline for each account that provides information about the creditor and the debt.
Understanding how tradelines function will help you understand how to interpret your credit report and what lenders look for when they do a credit check.
How Do Tradelines Appear On Your Credit Report?
There is a tradeline on your credit report for each revolving and installment credit account that you have. Credit cards and lines of credit are examples of revolving tradelines, while installment tradelines include mortgages, auto loans, school loans, and personal loans.
A tradeline provides account information in addition to identifying the loan. Typically, this information includes:
- Name and address of the lender
- Account Type
- Account number (partial)
- Current Status
- Account opening date
- If appropriate, the date the account was closed
- Last activity date
- Current account balance
- Loan amount or credit limit at the time of application
- Payment schedule
- Recent balance (for credit cards only)
- History of payments
There is no better way to keep track of all your credit accounts than by using this information. The lenders give the data for tradelines by reporting the most current information they have on your accounts.
Although lenders may vary in how they represent your information, you may observe some discrepancies across tradelines.
What Is A Tradeline Used For?
Your tradelines information is mostly utilized to determine your credit score. However, since a credit score is just a snapshot of your creditworthiness, lenders may also review the tradelines on your credit report to get more information.
If you fall behind on payments on a certain account, for example, a lender may look at the tradeline to see how long the account has been late. If your credit scores have dropped due to a high credit card use rate, a creditor may establish if you’re really a credit risk by comparing the debt to the credit limit.
If your limit is $300, for example, maxing out the card may not be as big of a red signal as if your maximum is $10,000.
What Happens If Your Tradline Is Removed?
If you are an authorized user on a credit card, you or the principal cardholder may opt to remove you from the account. If this occurs, the tradeline will no longer display on your credit report. Tradelines are also used to increase a CPN credit score; but be careful, majority of the CPN sellars are illegitemate.
If the tradeline had good information that was assisting in the improvement of your credit scores, its removal may have a negative influence on your scores. On the other hand, if the credit card account has a high use rate or concerns with payment history, it may enhance your credit score.
You may also ask for the removal of a tradeline if it was formed fraudulently. In this scenario, eliminating a tradeline might be beneficial to your credit since it eliminates an unapproved account that may include bad information.
Check Your Credit Report On A Regular Basis
Your credit report’s tradelines include a plethora of information for both you and lenders. Check your credit report on a frequent basis to ensure that all of the information provided in your tradelines is true and valid.