There’s a constant buzz about tradelines. Tradelines are viewed as some special thing that will fix everything wrong with your credit. The number of videos, blog posts, marketing campaigns, etc., where I have seen this being stated is astounding. Let’s take a minute to clear up what tradelines are, and what tradelines can do.
What are tradelines?
First up, “what are tradelines?” Ultimately this is an antiquated term for “the stuff on your credit reports.” What stuff on your credit reports you say, all the accounts…all of them are tradelines. Again, every account on your credit reports is a tradeline. Tradelines fall into a few major categories…
TYPES OF TRADELINES
MORTGAGES – payments on loans toward the purchase of real estate
AUTO – payments on loans toward the purchase automobiles
INSTALLMENT – payments on any type of loan that has a predetermined payment schedule
REVOLVING – credit cards or lines of credit in which you have control over the balance
Why does the type of tradeline matter?
One word, diversification. Showing a mix of various types of tradelines shows responsible management of different types of payment structures (monthly installments of various types and responsible use of your lines of credit). Depending on the type of credit you’re applying for (mortgage, auto loan, etc.) showing a responsible use of that type of credit in the past presents you as being a lower risk candidate for approval
Missing a certain type of tradeline can be viewed in the same way as having a vitamin deficiency in your body, you’re not operating at your peak potential. This can affect everything from your overall credit ratings, to your ability to be considered a candidate for approvals. If your reports aren’t balanced your ability to accomplish anything is compromised.
How do I find out if my reports are balanced?
One….Do a self check. Follow the following checklist:
- 2 – 4 Revolving/Line of Credit Accounts
- 1 Automobile Account (finance or lease option)
- 1 Mortgage Account
If you’re missing anything on the check list check out our DEALS to see how we can help.
Two…Get started with one of our COACHING PLANS. If you’re reports aren’t balance we’ll help you figure out exactly what is missing