What is a tradeline?
It’s one thing to be aware of whether or not a tradeline can help your credit history, but it’s another to know what a tradeline actually means, which is why, if you’ve made it this far, you’re going to read content that will not only interest you, but also guide you to the solution you’ve been needing when it comes to your credit.
A tradeline is an account record that appears on your credit report and is established on a borrower’s credit report when they are approved for credit. The tradeline records all activity associated with an account. The different types of tradelines include mortgages, auto loans, student loans, furniture loans, among others.
Comprehensively, tradelines are used by credit reporting agencies to calculate a borrower’s credit score. Different credit reporting agencies give different weights to trade line activities in establishing a credit score for borrowers.
Do you know how a tradeline works?
A tradeline is an important recording mechanism that tracks borrowers’ activity on their credit reports. Each credit account has its own tradeline. Borrowers will have several tradelines on their credit report, representing the individual loan accounts for which they have been approved. The basic types of accounts are those that are paid in fixed installments, such as a car loan; mortgages; revolving accounts, such as credit cards; and open accounts, for which full payment is made upon receipt of goods.
Tradelines may contain a variety of different data related to the creditor, the lender, and the type of credit being provided. The tradeline will typically contain the name of the creditor or lender, the account or other identifier of the type of credit being extended, the parties responsible for repayment of the loan, and the payment status of the account.
The tradeline will also contain certain milestones for the account, such as the date credit was granted, the credit limit, payment history, all delinquency levels if any defaults have occurred, and the total amount owed on the last report.
You should keep in mind how important tradelines are and that they build a credit report, but it is also an act of responsibility.