Tradelines and your credit report

Dear Experian,

Is adding tradelines to your credit beneficial? What are the pros and cons of tradelines? Do you have any documentation concerning tradelines?



Dear RRI,

“Tradeline” is industry jargon for “account.” So, if you have a credit account, you have a tradeline. Tradelines are important because without them, you don’t have a positive credit history to report.

If you think of tradelines as references, you can see that having more tradelines gives more information with which to predict how you will repay new credit accounts. Similar to job references, if you have performed well in the past, you are more likely to perform well in the future.

It is true that having tradelines that have been opened a long time is generally more positive because you’ve demonstrated good risk for a longer period, just like with a longer job history.

It also is true that having a credit card tradeline in addition to an installment debt tradeline can be more positive because it shows that you can self-manage a varying monthly payment amount and keep your balances well below the credit limit.

But, it is better to think in terms of quality over quantity. If you have great references, meaning you have always paid as agreed and you aren’t charging to your limits, it doesn’t take very many tradelines to be able to predict that you will be a good risk.

It probably won’t hurt you to have a lot of good references, but at some point additional good references won’t add a lot of additional meaning.

Thanks for asking.

- The “Ask Experian” team

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