What is Tradeline Renting?

 

Many times we get the question of what is the point of getting tradelines if we don’t guarantee the results? As an example, we had a recent customer who called us up wanting to get a better rate on his home purchase, get a few credit cards, and refinance his auto loan, and he asked us how to purchase tradelines, and if they would help him. The answer is, yes, tradelines will always help, as putting positive data can only raise the scores, but we cannot guarantee that he would accomplish the goals he had, so he wondered why it was that he would do it.
For this, we have an analogy:
Let’s say you want to go fishing, and you have to get a license and hire a boat and captain for the chance to catch what you’re after, let’s say yellowfin tuna. By getting the license and hiring the boat, can the captain guarantee you get to reel in a yellowfin? No, because there are too many factors, the ocean is unpredictable. It’s the ocean. By getting the boat and license and captain to take you out, you are purchasing a chance to get what you’re after.
Tradelines are just like this, so you may say “If I add tradelines to my credit, you can’t get me what I want, what’s the point?” The point is, if you don’t add tradelines, you’re in the same position you are now, and that situation needs improvement. This is what makes tradelines so valuable, by renting the history of a great credit card with perfect payment history, a good limit, and long history, you see improvement to your FICO scores.

So, What is Tradeline Scoring?

Any time you add new data to a credit report, the reports will get rescored. You can either order new reports, or wait for them to update automatically. Does that mean you can clean up credit with tradelines? Not really, the tradelines are the positive data, and do not serve to negate negative marks completely. It’s not a one-to-one ratio. For example, if you have a bucket of white paint (your credit), and you put just a few drops of black paint in (negative marks), then the whole bucket is changed to a different color. Negatives have far more impact that positive data. That’s the way the algorithms work. The negatives should be removed as best you can before adding positive data. But…if you’re asking how to add tradelines to build credit, that is a different story.

New Credit File with Tradelines

If you are in the enviable position of having a blank profile, then tradelines alone can give you scores in the upper 700’s, even into the 800 realm at times. How does a person get a blank profile? Well, there are a few scenarios: you are young and have never used credit, you are not young and you’ve never used credit, you have used credit and you remove the negatives and inquiries–this will likely get you to a point where your score is reported as NA (if you don’t have credit accounts in good standing as well). So let’s say you’ve done the last one, and you want to get a home, but you can’t get that good rate, are there certain credit tradelines that attract subprime customers? That’s the beauty of tradelines, if you get the negatives removed and get the right tradelines put onto your reports, you will be able to qualify for prime lending, so the question is a bit of a moot point.
Tradelines, used correctly, will qualify you for the prime rates you are after. They may not be instant trade lines, but waiting a little bit (up to a month) and spending some money (even up to $2,000) could net you that next rate tier, which saves you tens of thousands of dollars over the course of the loan. This may mean you need more than one, so at that point you are looking at purchasing trade line packages, and this can shoot the price up, sometimes over that $2k mark, but again, to save yourself tens of thousands of dollars, it’s most likely worth your time and money to do so.