Understanding the world of credit scores can be quite challenging. After all, they don’t teach you anything about it in school.
You are probably here because you tried to get a loan or credit card recently and they said your credit score isn’t that great. They may have given you incredibly high interest rates or declined it altogether.
But, you need to understand that there are plenty of ways to boost your credit score and get your life back on track. One of which is buying tradelines.
Before getting into the benefits, let’s dive into what tradlines actually are.
Understanding Tradelines
When you buy tradelines, you are basically adding more accounts to your credit report. Now, what does that mean?
You are basically paying someone to add you as an authorized user on one of their loans or credit cards. You are paying them because they have an excellent credit score.
But, how does being on someone else’s account benefit you?
1: Instant Boost to Your Credit Score
One of the best perks of adding accounts to your credit report is potentially increasing your credit score.
When you become an authorized user on an account with a positive payment history and low credit utilization, you can have a better score just by being associated with them. This can lead to a significant bump in your score within a short period, which could be invaluable if you are looking to get a car or home through the bank.
2: Diversification of Your Credit Portfolio
To improve your credit score, you have to look into what the lenders love to see from the borrowers.
One of the things lenders love is a diversified credit portfolio. By adding tradelines from different types of accounts, such as credit cards, loans, and mortgages, you show creditors that you can responsibly manage various forms of credit.
This diversity also showcases your financial responsibility and can have a positive impact.
3: Accelerated Credit Building
If you haven’t worked on building credit all of your life, then you will find that building credit can be incredibly slow. You might have to spend years to build a good credit score.
Fortunately, tradelines make things much easier. Instead of waiting months or years to establish a solid credit history, you can add tradelines and piggyback off someone else’s established credit to get a jumpstart.
4: Improved Debt-to-Credit Ratio
You may have read about or heard of credit utilization. In technical lingo, that is known as the debt-to-credit ratio.
This ratio plays a big role in determining your credit score because it measures how much of your available credit you are using at any given time.
When you add tradelines with low balances and high credit limits, you can easily lower your overall utilization ratio and positively impact your credit score.
5: Learn Responsible Credit Habits
Finally, adding tradelines is more than just about improving your credit score. With tradelines, you have the opportunity to learn responsible credit habits.
By observing how the primary account holder manages their credit, you can gain valuable insights into budgeting, spending, and debt management, among other things. These lessons can serve you well in the future because you can’t rely on tradelines your entire life.
