"What Are Trade Lines"
A tradeline is a term used by credit reporting agencies to describe credit accounts listed on your credit report. For each account you have, there is a separate tradeline, which includes information about the creditor and the debt. Understanding how tradelines work can give you a better idea of how to read your credit report and what lenders see when they check your credit.
What Are Tradelines on Your Credit Report?
For each revolving and installment credit account that you have, there's a tradeline for it on your credit report. Revolving tradelines include credit cards and lines of credit, while installment tradelines include loans, such as mortgages, auto loans, student loans and personal loans.
In addition to identifying the debt itself, a tradeline includes information about the account. That information typically includes:
- Lender's name and address
- Type of account
- Partial account number
- Current status
- Date the account was opened
- Date the account was closed, if applicable
- Date of last activity
- Current balance
- Original loan amount or credit limit
- Monthly payment
- Recent balance (for credit cards only)
- Payment history
This information allows you to view all the relevant information about each of your credit accounts in one place. The information for tradelines is provided by the lenders as they report the most recent information they have about your accounts.
Keep in mind, however, that lenders may differ in how they report your information, so you might see some variations in information across tradelines.
What Are Tradelines Used For?
The information included in your tradelines is primarily used to calculate your credit scores. Because a credit score is just a snapshot of your creditworthiness, however, lenders may also check the tradelines on your credit report to get more information.
If you're behind on payments with a certain account, for instance, a lender might check the tradeline to find out how long the account has been delinquent. Or if your credit scores have dipped because you have a high utilization rate on a credit card, a creditor can determine whether you're really a credit risk by checking the balance versus the credit limit.
If your limit is $300, for instance, maxing out the card might not be as much of a red flag as if your limit were $10,000.
What Happens When You Are Removed From a Tradeline?
If you're an authorized user on a credit card, you or the primary cardholder may choose to remove you from the account. If this happens, the tradeline will no longer appear on your credit report.
If the tradeline had positive information that was helping boost your credit scores, the removal could have a negative impact on your scores. On the flip side, it could help your credit scores if the credit card account has a high utilization rate or issues with payment history.
You may also request to have a tradeline removed if it was created fraudulently. In this case, removing a tradeline can be a good thing for your credit because it gets rid of an unauthorized account that may have negative information attached to it.
Check Your Credit Report Regularly
The tradelines on your credit report provide a wealth of information to both you and lenders. To make sure all the information contained in your tradelines is accurate and legitimate, check your credit report regularly.