You may have heard of the term “Tradeline Information” in your financial circles. For those who are not aware, “Tradeline Information” is all of the information that lenders compile about you prior to offering you a loan or line of credit. It can include such things as your credit score, current employment, any judgments or other derogatory items on your credit reports, and the types of credit you use. Basically, it gives lenders a complete picture of who you are as a borrower. So tradelines information directly impact your credit score.
The reason that tradelines are important is that credit scores are based primarily off of your past credit histories. This means that even if you don’t have a perfect credit history going into a new loan or line of credit, lenders will still look at your past history to see what kind of risk you present. If you have had a few late payments or charge-offs in the past, then your credit score may be low enough to put you in the “high risk” category. However, if you have never had these types of problems before, then you will most likely be able to get a good unsecured loan, regardless of your credit score.
In order to prevent being sold to, or “qualified” by, a lender based solely off of your credit score, you must know how tradelines work before applying for a new line of credit. This means knowing where the information comes from. There are many different pieces to the tramlines puzzle, and they include the three major credit reporting agencies: Equifax, Experian, and TransUnion. All three of these credit agencies share a tradeline, which allows them to give potential creditors an idea of your credit history.
After you have secured a loan, you will need to get copies of all three credit reports and review them. You can request all three reports at once or request each of the credit reports individually. Knowing what is on your credit report, and how well it is being reported, will affect your credit score. If you find that your credit scores are low, then you can request that the lenders who made the offer to remove the unfavorable information from your credit reports. You can also dispute any inaccuracies with the lenders in question.
If your credit scores are already low, then you may need to obtain the tradeline for each of the credit companies prior to submitting your application. Once you have the tradeline information from each of the lenders, you can compare the data. You will want to look for differences in the amounts on your credit reports. If the amount on your reports is significantly different between the tradeline and the lenders, then this may be a sign that you will not be approved for this loan. If this is the case, you should ask the lender to explain the difference and request that the situation be remedied.
As you can see, knowing how tradelines information directly impacts your credit score is quite complex. However, if you know how to read the treeline, you can determine the risk that lenders bear when approving your loan. If you have bad credit, but the amount you are offered is much lower than the amount that you would qualify for if you had good credit, you may want to work on fixing your credit before applying for a tradeline. Otherwise, you will pay more for the loan and never get the amount that you were hoping for.