What are tradelines for credit repair?

In all transparency, we did not think of this blog post on our own. We actually saw this question in Google search (see above). Ironically, Google liked an answer from our site (as you can see above). However, we didn’t. So, we wanted to correct the record. Or, rather, the search engine results page. This is probably the worst “SEO” idea, ever. We will put your entitlementĀ to knowledge above our rankings.

Credit repair and tradelines are not the same.

Andy, from the series “The Office” once said that he thought of his co-workers as a team. Dwight quickly replied, “We’re no more a team than the people staying in the same hotel are a team.” That’s how we feel about credit repair and tradelines. They are not on the same team. They are not staying at the hotel together. For best credit results, disconnect them in your head. For the best expectation of credit results, disconnect them in your head.

Okay, fine… what’s the difference between credit repair and tradelines?

In a formula: credit repair = removing negative accounts; tradelines = adding positive accounts. You may have heard the phrase “inaccurate, incomplete and unverifiable” used by credit repair companies. This isn’t a marketing phrase, it’s derived from the Fair Credit Reporting Act that makes credit repair possible. Here’s an excerpt:

You may also have heard the phrase “piggybacking credit” or “adding authorized user tradelines.” This isn’t a marketing phrase either. It’s industry jargon. Here’s how a study by the Federal Reserve described the practice:

Again, adding tradelines is adding positive credit information. Engaging in credit repair is removing negative information.

Is this a relevant difference?

Yes, because, even though adding tradelines works, it doesn’t always work. If you think you’re going to boost your credit score no matter what, you’re wrong. If you have too many negative items, tradelines won’t work. Also, even if you have negative items and somehow tradelines do work, you may still be denied for a loan.

Here’s an example of its relevance.

For example, we know of a client (who didn’t listen to us) that added tradelines (from a different company) and her scores went up. They went up significantly. She called and told us the good news. Perhaps she was rubbing it in our faces, but we wished her the best. Then, a few days later, she called and told us that she was denied for the loan, despite her good scores. In her case, she had a 3-year-oldĀ home equity line that was settled for less than the full amount. Because of some obscure underwriting guideline, the lender viewed this as a form of “foreclosure” which is an automatic denial (despite good scores).

The moral of the story is that if you need credit repair, do it before adding tradelines. Clearly, credit repair and tradelines are not one in the same.

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