The accounts that are listed on your credit report are referred to as "tradelines." The two most common types of tradelines that you will see on your report are revolving credit accounts (such as credit cards or other lines of credit) and installment credit accounts (such as mortgages or auto loans.)
If you don't have enough tradelines on your credit report, it can put you in the "thin credit profile" category or even make you "unscorable," meaning that you don't have a credit score. Even if you don't fall into one of these two categories, there are numerous benefits to adding new positive tradelines to your report.
Let's take a look at all of the most important details you will want to know about adding tradelines to your credit report.
Tradelines, in short, are the accounts that appear on your credit report. The two most common types of tradelines for individuals are:
If you have any debts that have been sold to collection agencies, you will probably also see these appear as separate tradelines on your credit reports.
The tradelines on your report are important because they directly impact your credit scores. They are an essential part of your credit history. The information found in your tradelines-- including the length of your credit history and your payment history-- will be used to calculate your credit scores.
To learn more about tradelines, check out our article about how long tradelines stay on your credit report.
There are a number of reasons you might want to add a tradeline to your credit report, including:
There are three primary ways you can add tradelines to your credit report:
The first way you can add a tradeline to your report is by opening a new account. This might mean applying for an unsecured credit card, a secured credit card, or a loan. I've personally used installment loans in the past, for example, to help my own credit score and credit file.
If you have reasonable credit, the most obvious option is to apply for a traditional credit product, such as a credit card from a lender, a credit account through department stores and merchants, or a personal loan.
However, if you find yourself in a situation where you will struggle to qualify for a traditional product, you could also apply for a secured credit card.
Secured credit cards require a security deposit that will equal the credit limit you are offered. Since you are borrowing against your own deposit, it is much easier to be approved for a secured credit card than an unsecured credit card.
Of course, you'll want to be thoughtful when applying to borrow money-- the whole plan could backfire if you end up digging yourself into debt. Adding tradelines to your credit report will ultimately only be favorable to your credit score and creditworthiness if you are able to make on-time payments and otherwise prove that you are a responsible borrower.
You don't necessarily have to apply for a new credit card or loan in order to add a tradeline to your credit report.
You might also:
Perhaps one of the easiest ways to add another tradeline to your credit report is to ask someone you are close with if they would be willing to add you as an authorized user to one of their accounts.
If a parent, relative, or close friend is willing to add you as an authorized user, it will add the tradeline to your credit report. This will allow you to benefit from the positive payment history, credit history length of your account, and additional available credit of this account.
Before asking to be added as an authorized user on someone else's account, you'll want to make sure that their credit history is excellent and their income is stable. Otherwise, it could end up backfiring and harming your credit rather than helping.
For what it's worth, it is possible to be added as an authorized user but not be given access to actually using the available credit. This can help put the other party's mind at ease, as they will know there is no risk of the arrangement damaging their credit.
One way you can add your utility accounts to your credit report is through a program like Experian Boost, which we will discuss a little later on in the article.
However, you can also contact your utility companies directly and ask them if they would be willing to report your information to the credit bureaus. Of course, you will only want to do this if you have a positive payment history, and adding the tradeline will benefit your credit file.
There is no guarantee that your utility companies will comply, but it also isn't uncommon. There is no harm in asking, and if they say yes, it could help improve your credit report and credit score.
Creditors almost always report your account information to the three major credit bureaus (Experian, Equifax, and TransUnion.) However, it is possible that some of your creditors do not report to all three of the bureaus, and some in-store accounts might not report to any of the bureaus.
For example, let's say that you purchased an expensive appliance using an installment loan through a retailer. If you are making payments for it regularly and on time, you might be able to ask the retailer to report your information to the credit bureaus. When you communicate with them, make sure you ask them to report your information to all of the credit bureaus.
Before we start telling you why Experian Boost can help you add tradelines to your credit report, it's worth understanding that you will be required to share your accounts and banking information in order to use this service. It's entirely up to you whether you feel comfortable with this, and Experian states that they don't store consumer credentials and use world-class encryption in order to ensure that your data remains secure.
What is Experian Boost, exactly, and how can it add tradelines to your credit file?
Basically, Experian Boost is a credit-building tool that will allow you to raise your FICO score instantaneously. The way it works is that you can add accounts that have positive payment histories, such as phone bills, utility bills, and even streaming service payments.
You will need to link your bank account and any other accounts that you use to pay your bills. From there, Experian Boost can use the information regarding your on-time payments to add tradelines to your report and increase your score.
There are a few alternatives to Experian Boost that are worth knowing about, including eCredable Lift and Perch.
One of the benefits of eCredable Lift is that there is a wider selection of utility providers to choose from, while Perch lets you add your on-time rent payments to your credit report.
When your credit history has too few tradelines, it can mean that you have a "thin credit file" or that you're "unscorable." Both of these can be obstacles to having a healthy credit score.
If you have less than three tradelines, it means that you have a "thin credit file."
Even if you have at least three tradelines, there can still be additional benefits to adding more tradelines to your credit report.
You can benefit from adding tradelines to your credit report in a number of ways, including:
Positive tradelines (like well-managed loans or credit cards) can help to increase your credit score. When your credit report clearly shows that you have been making payments on time and demonstrating responsible credit usage, it can have a positive impact on your score.
If you are able to add a tradeline to your credit report that has a high credit limit and a good payment history, it can increase your creditworthiness.
Creditworthiness is the extent to which an individual or company is determined to be suitable to receive financial credit. It is typically based on their history of reliably repaying debts in the past.
The more creditworthy you seem to lenders and credit card companies, the easier it will be to receive approval when you apply for loans or new cards.
If you are able to add an existing tradeline to your credit report that is older than your oldest account, it can help to expand your credit history. The length of your credit history is one of the factors taken into account when calculating your credit score.
Lenders like to know that you have experience with several types of tradelines when applying for a loan. You can help increase your creditworthiness and maybe even your credit score by adding a tradeline from a different type of account.
For example, if you only have credit card tradelines on your credit report, you might consider getting an installment loan to diversify your credit profile.
To learn more about using installment loans to improve your credit, check out our ultimate guide to payment and installment plans.
If you have a strong credit profile with positive tradelines, it can help you receive lower interest rates and more favorable terms on both credit cards and loans.
Over your lifetime, you could save tens of thousands of dollars if you were able to receive the most favorable rates and terms when you borrow money. According to Experian, taking out a 30-year fixed-rate mortgage with an interest rate of 4.3% with a 700 credit score would cost you $16,319 more over the life of the loan than if you had a credit score of 760.
If you are able to add a tradeline with a high credit limit, it means that your overall available credit can increase significantly. This results in a lower credit utilization rate, which is one of the factors taken into consideration when calculating your credit score.
Your credit utilization ratio represents the amount of revolving credit that you are currently using divided by the amount of total credit that you have access to. Credit utilization ratios are typically expressed as a percentage and should ideally be below 30%. When it comes to credit utilization ratios, lower is always better.
When you add a new tradeline to your credit report and make on-time payments consistently, it allows you to build a positive payment history. Lenders will look closely at your payment history when determining whether or not to extend a loan or line of credit to you, as they want to know how likely you are to pay them back on time.
Payment history is a crucial factor in determining your credit score. In FICO scoring models, your payment history accounts for 35% of your score. Even one 30-day late payment can result in a decreased credit score.
Are you thinking about taking out a loan to buy a home or a car? Were you considering applying for a personal loan to consolidate your credit card debt?
No matter what type of loan you're applying for, adding a positive tradeline can help your chances of being approved. The same goes for applying for credit cards, as creditors want to see that you have experience managing credit responsibly.
If you have a less-than-ideal credit score, you aren't alone. According to LendingTree, 42% of Americans were denied a financial product (such as a personal loan or a credit card) due to their credit score between June 2021 and June 2022.
There are a number of things you can do to help build your credit when there are negative items on your credit report, including adding positive tradelines. When you are able to add tradelines in good standing to your report, it can offset the negative impact of less desirable items and help you in your quest to demonstrate creditworthiness to lenders.
Having good credit can open up new financial opportunities to you, and one of the ways you can improve your credit is by adding positive tradelines. Beyond getting the best rates and terms for credit cards and loans, an excellent credit score can help you qualify for rental applications, obtain favorable insurance rates, and secure lower security deposits.
When you research adding tradelines to your credit report, you will come across numerous articles claiming that you can simply buy tradelines that will then be added to your credit report.
It isn't difficult to find companies that sell tradelines for a fee, which can be expensive indeed (some prices stretch up into the thousands of dollars.) If you utilize one of these services, a tradeline will usually be added to your report for a brief period before it is removed as an open account.
Whether you have a thin credit profile or your credit report isn't the shining example of responsible borrowing that you hope it would be, adding positive tradelines can benefit your credit file and your credit score.
There are, luckily, a number of different ways that you can add new tradelines to your report, including opening a new account, adding an existing account, or using a service like Experian Boost.
Considering that there are a number of avenues you can take to add tradelines to your report, it really isn't worth going the route of buying tradelines from a potentially predatory company. Not only can this be expensive, but lenders and credit bureaus can see it as deceptive, and it can even put you at risk of committing bank fraud.
Building your credit the right way can take time, but it's worth going about it through the proper methods. Otherwise, you could end up harming your credit more than you help it.
If you're interested in discovering more tips for improving your credit, make sure you check out our Credit Building Tips blog.