Can piggybacking tradelines hurt your credit score?
Whether your credit score can decrease after adding tradelines is a good question. It’s also simple to answer. But, this question applies to anything. Tradelines are not unique, in this regard. For example, can an ice cream cone taste bad? Can cars run poorly? The point is that anything can go wrong. The real question is how to avoid potential negative consequences of adding tradelines. We will cover all the possibilities (we can think of) where tradelines can decrease (or not increase) your credit score.
Hire a legitimate tradeline company.
Step one, hire a legitimate tradeline company. Step two, repeat step one. Seriously! The first major mistake you can make is hiring an incompetent company or individual or an out-right scam artist. Without going into a laundry list of indicators of scammers, here’s some basic must-do advice. If the company has many years of experience with the same name, there is value in their brand. They’re not going to rip you off for a few hundred bucks, because they value their brand more than that. In addition to the brand, make sure the company is bonded. A bonded company is like a company with an insurance policy. So, if they screw around (which they won’t if they’re bonded), you can file a claim against the obligee. This is usually the State in which they operate. The State pays you and the State goes after them. If they have years of experience and they’re bonded, you’re in good hands.
Late payments on revolving accounts.
A major portion of your credit score is revolving credit. Up to 35% of your score is payment history. That’s the largest percentage of score factors. If you have recent late payments on revolving accounts, you will drastically reduce the positive impact of the tradelines purchased from a tradeline company. NOTE: A good company will tell you this and not sell you tradelines, even if you want them, anyway.
Tradelines with a high balance.
You can reduce your credit score if you purchase and add a tradeline to your credit report with a high balance. This will offset (in a bad way) your debt to credit ratio. In fact, this is kind of the opposite of what you should do. One of the reasons to add a tradeline is to decrease (not increase) your debt to credit ratio.
Tradelines with limits that are too high or too low.
Different than balances, which affect your debt to credit ratio, the available limit of a tradeline also matters. If the limit is too low, it will have limited, if any, impact on your credit score. In fact, adding a tradeline with a limit lower than your average limits could bring down your credit score. Conversely, adding a tradeline with a limit that’s significantly higher than your average limits could be marked as authorized user abuse, rendering the tradeline completely useless.
Tradelines with a young age.
Similar to tradelines with a large balance, tradelines with a young age may result in a reduced score or no improvement to your credit score. “Young age” means that the date opened on the account to which you’re added as an authorized user is very recent. You will benefit most with an older account. However, like limits, too old or too young can also have negative impacts. You need a company or expert to help you with this.
Too many authorized user tradelines.
If you exceed three authorized user tradelines, it will stick out and a good underwriter will (rightfully) disregard them as authorized user abuse. The “5 tradeline packages” you see on websites is exhibiting their disregard for your credit. Or, it exhibits their lack of knowledge.
How to make sure piggybacking tradelines and credit do not hurt your credit score: Hire a legitimate company with experience. You’re not going to save money by buying “cheap tradelines.” You’re just saving money in the form of working with someone that doesn’t know what they’re doing. Also, it won’t be that big of savings. In fact, it might (and very likely will) cost you. What do you have to lose with a phone call? Call us today!