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Buying tradelines generally isn't a good idea, as the practice carries high risks of scams and deceptive lending concerns. It can also be costly, and any increase to your credit score that may result is typically short-lived.
Here's what you need to know about the practice of buying tradelines and the risks involved.
What Are Tradelines?
A tradeline is another name for an account that shows up on your credit reports. Each loan and credit card you open is a separate tradeline that includes details about the creditor and your account.
Tradelines can also appear when someone adds you as an authorized user on their credit card account. When done properly, this common practice can be a good way to establish a new credit history, bolster a thin credit file or rebuild credit after a negative event.
Learn more: How to Build Credit: A Comprehensive Guide
How Buying Tradelines Works
Buying a tradeline involves paying someone to add you to one of their credit accounts, typically as an authorized user on a credit card.
Many credit card companies report account activity to the credit reporting agencies (Experian, TransUnion and Equifax) for both the primary cardholder and authorized users. As a result, the seller's positive account history can potentially help improve your credit.
Tradeline companies act as intermediaries, connecting buyers and sellers for an additional fee. Depending on the account's credit limit and age, the cost can range from a few hundred dollars to nearly $2,000.
To complete the transaction, you'll typically need to provide a copy of your Social Security card, as well as a copy of your driver's license, state-issued ID or passport. Then, you'll be added to the seller's tradeline for a couple of months, after which you'll be removed. During that time, positive account activity could help increase your credit score.
Note: When you're removed as an authorized user, the account generally disappears from your credit report, and its history no longer counts toward your credit score.
Buying Tradelines vs. Becoming an Authorized User
When you buy a tradeline, you're typically paying to be added as an authorized user on a stranger's credit card account.
In contrast, a traditional authorized-user arrangement involves asking a family member or friend to add you to their account. This process is free unless the card charges a fee for authorized users, which is rare. You'll also usually get your own card that you can use (with the primary cardholder's approval), which can help you practice good credit habits.
You aren't legally responsible for the bill as an authorized user if you make charges to the account, but consider discussing payment responsibilities with the primary cardholder to avoid damaging your relationship.
| Buying Tradelines | Becoming an Authorized User | |
|---|---|---|
| Cost | Roughly $300-$2,000, depending on the account's age and credit limit | Usually free, though some cards charge an authorized user fee |
| Relationship to the account holder | Stranger matched with you by a tradeline company | Typically a family member or friend |
| Card and account access | No card or direct account access | May receive your own card, which you can use with the primary cardholder's approval |
| Risk level | High | Low |
Learn more: Will Being an Authorized User Help My Credit?
Why You Should Avoid Buying Tradelines
Purchasing access to a stranger's tradeline could raise your credit score for a short time, but there are several drawbacks that can outweigh that benefit.
High Cost With Short-Term Results
You may pay hundreds or even thousands of dollars for a result that may only last a few months. Any potential increase to your credit score will fade once you're removed from the account.
What's more, newer FICO® Score☉ Θ and VantageScore® credit score models give less weight to authorized-user status than if you were the primary account holder. So, the potential impact may be less than you'd hope.
Risk of Scams and Identity Theft
Buying tradeline access requires that you hand your Social Security number, driver's license number and other sensitive information to someone you don't know. A tradeline service may take steps to minimize your risk, but working directly with an individual could put you at risk of identity theft.
Selling authorized user access is also a common sign of credit repair scams.
Lender Skepticism
Authorized-user accounts aren't your financial responsibility, so some lenders disregard them completely. Mortgage lenders, in particular, want to see that you have at least a few accounts in your own name.
Fannie Mae takes authorized-user accounts into consideration with its automated underwriting system. But if your application goes to manual underwriting, they're only accepted if the primary account holder is your spouse or a co-borrower on the application, or you can prove that you've been paying the account for at least a year.
Is It Illegal to Buy Tradelines?
There is no law against buying tradelines to improve your credit. However, buying tradelines may be viewed as deceptive by lenders and credit reporting agencies.
Credit scores are designed to help lenders determine a borrower's standing, and most use your credit scores and credit reports to determine whether to approve a credit application and what terms you qualify for. With a traditional authorized user arrangement, it's possible for you to actually use the card you receive and practice good credit habits, but that's not the case when you buy a tradeline.
In other words, if you pay money to improve your credit scores without doing any of the work or even getting a card to use, you could be falsely representing your creditworthiness to potential lenders. That puts the practice in a legal gray area. While the purchase itself won't land you in trouble, you can face legal consequences under the following circumstances:
- Bank fraud: If you use a purchased tradeline to artificially boost your credit score and then misrepresent your true creditworthiness on a loan or mortgage application, it can be viewed as deceptive. Deceiving a lender to obtain credit can be prosecuted as bank fraud under 18 U.S. Code § 1344. Penalties may include a fine of up to $1 million and up to 30 years in prison.
- Credit privacy number (CPN) and identity theft scams: Many shady tradeline companies will tell you to buy a CPN to hide a bankruptcy or bad credit. In reality, these numbers are often stolen Social Security numbers belonging to children or deceased individuals. Using a CPN is a federal crime.
- Primary tradeline fraud: Purchasing an authorized user tradeline (where you piggyback on someone else's good history) is legal. However, buying a primary tradeline—where a company falsely claims you are the main owner of a historical account you never applied for—is fraud.
Alternative Ways to Improve Your Credit Score Fast
If your credit needs some work, buying a tradeline may seem like a quick fix, but it won't have as much of a positive impact as some of the alternatives. Here are some other ways to improve your credit score fast.
Pay Down Credit Card Debt
Your credit utilization rate, calculated by dividing a credit card's balance by its credit limit, is a major factor in your credit scores. If you have a high utilization rate, paying down your balance can help improve your credit score as soon as the account gets reported again to the credit reporting agencies.
Some credit experts suggest trying to bring your utilization down to below 30%, but the lower it is, the better it will be for your credit score.
Dispute Credit Report Inaccuracies
Start by checking your Experian credit report, and look for accounts or other details that you don't recognize. You can also get free weekly reports from all three credit bureaus through AnnualCreditReport.com.
If you find something inaccurate, incomplete or unverifiable, you have the right to file a dispute with the credit bureaus. If a bureau confirms your dispute, it'll either remove or correct the information, and your credit score will respond accordingly.
Get Credit for Bills You Already Pay
Payments for rent, utilities, phone, insurance and streaming subscriptions typically aren't included in your credit file. But with Experian Boost®ø®ø, you can get credit for making these regular monthly payments.
Once you register, you can link your financial accounts and allow Experian to identify your positive payment history. Then, you'll verify the data and confirm you want it included in your Experian credit file. Once you do so, your FICO® Score will be updated immediately, possibly resulting in a credit score boost.
Focus on Developing Healthy Credit Habits
Buying a tradeline may seem like a good shortcut, but there's no guarantee you'll get the benefits you're paying for, and the ethical and potential legal issues related to the practice are reasons enough to think twice.
If your goal is to improve your credit score and keep it in good shape, the best way to do that is to develop and practice good credit habits. Make your payments on time every month, keep your credit card balances relatively low, pay them in full each month and avoid unnecessary debt.
As you establish a positive credit history over time, check your credit scores regularly to track your progress.
