Credit scores are based upon five primary factors from the credit report. While adding authorized user tradelines can be beneficial for most people, they do not always result in notable changes to the credit score.

For clients with little to no change in the credit score or clients with a decrease in the credit score, the credit reports were reviewed to determine why the score did not change/decrease.

Roughly 5.8% of the individuals in this study experienced a decrease in credit score.

The primary reasons that clients had no improvement in the credit score or had a decrease score were as follows:

• increased utilization of accounts,
• new collections were placed on the report,
• the addition of new inquiries,
• old delinquent accounts were updated,
• and there were recent late payments.

The following chart shows the distribution of which factors were most prevalent when clients did not experience an increase in the credit score.

An increase in utilization decreases scores.

Given that the credit scores heavily factor in the accounts’ utilization, an increase in utilization can dramatically impact the credit score. Since the study participants were able to use their accounts throughout the study, this was the most prevalent factor that we saw inhibit the participants from improving their credit score.

Following that, new collections were another factor that was quite common among individuals whose credit scores did not improve.

The third most prevalent negative factor that was observed was the presence of new late payments.

Payment history is another factor that is heavily involved in determining the credit score, so a decrease in the payment history can significantly hurt the credit score.

Some other factors are the opening of new accounts, the closing of accounts, the addition of new inquiries, or new charge-offs and remarks. These factors contributed to combined account for roughly 25% of the cases, while the three prominent factors accounted for approximately 73% of the participants that experienced a decrease in score.

Interesting decrease in score.

It should also be noted that in 1 case, there were no negative accounts on the report, but the score still decreased. In this case, it is hypothesized that the credit scoring equation for the credit monitoring site was changed. Sites will routinely update their credit scoring equation, which will result in a change in the credit score even if no information on the credit report has changed. This is not a common occurrence, as it only accounted for 2% of the 5.8% of participants whose scores decreased.

Conclusion

Analysis 8

Change based upon the age of the individual

The study included participants that ranged in age from 19-72 years old.

The average change in credit score was analyzed based upon the participant’s age to determine if age had any impact on the change experienced from the addition of the tradeline. It was found that the average increase in the credit score was roughly 108, but there were no trends in which ages saw the most change from the addition of the tradeline.

This finding indicates that authorized user tradelines can be beneficial to individuals of all ages. There is not a single age range that benefits more than the other groups. It should also be noted that while there is no single group that benefited the most from the tradeline, the average increase across all groups was 108 points.

Another common belief is that the older the tradeline’s age, the more significant the impact on the credit score. This is primarily because FICO score models strongly consider the average age of accounts when determining a credit score.

The tradeline’s impact on the credit was analyzed based upon the tradeline’s age to assess this belief.

Because many factors influence the change in credit score, it can be tricky to isolate one feature. Only clients who ordered one tradeline were included in this portion of the study to account for this. This limited the need to account for the limits of multiple tradelines. 512 participants were included in this analysis.

The average change in score (tradeline age).

The average change in credit score was analyzed based on the tradeline age added to examine the impact of tradeline age on credit score. There were five age ranges specified in this study:

• 0-2 years,
• 3-5 years,
• 6-10 years,
• 11-15 years,
• and 16-21 years.

It was found that the age range that resulted in the highest credit score increase was the 6-10 age range. This age range saw an average increase of 108 points. In general, the data resembled a bell curve around this age range.

The tradeline’s average age with the minimum contribution to the credit was the 0–2-year-old tradelines. This is to be expected since these tradelines would not significantly increase the average age of accounts on the credit report.

Interestingly, the age group that made the second smallest contribution was the group of the oldest tradelines that were 16+ years old. This disagrees with the notion that higher age tradelines always have the most significant impact on the credit score. These results disagree with the hypothesis that the higher age tradelines would have the most significant impact on the credit score.

Finding indications.

The study indicates that higher age tradelines do not always have a more significant effect on the credit score than a younger tradeline. This finding is important because it implies that more factors than just the tradeline’s age should be considered when determining which tradeline should be added to a credit report.

Once again, it is essential to note that the tradeline’s age is not the only factor that impacts the score, so the change to the credit score is not solely due to the age of the tradeline that is added. While it is an essential factor, it cannot be thoroughly analyzed independently of the tradeline limit that is added.

Many individuals who research authorized user tradelines want to buy the biggest tradeline possible. This comes from the belief that large tradelines will result in the maximum increase of their credit score.

Analysis 6 looked at the average change in credit score based on the tradeline’s limit to analyze this mentality’s truth.

There were 8 categories of the size of the tradelines:

• $0 to $6,000;
• $6,001-$9,999;
• $10,000-$14,999;
• $15,000-$19,999;
• $20,000-$24,999;
• $25,000-$29,999;
• $30,000-$34,999;
• $35,000+.

Because many factors influence the change in credit score, it can be tricky to isolate one feature. Only clients who ordered one tradeline were included in this portion of the study to account for this. This ensured that there was no need to account for the limits of multiple tradelines. 512 of the participants were included in this analysis.

Analysis 6 findings.

It was found that the addition of tradelines with limits up to $35000+ had the highest average credit score. The credit score boost for this category was 91 points. This limit group was followed closely by tradelines with limits from $10,000-$14,999 with an average increase of 85-point increase. The next highest was $15,000-$19,000 with an increase of 79 points. All other categories had roughly the same impact, resulting in a median increase of 60 points.

The addition of tradelines with the largest limit resulted in the most significant average change in credit score. This implies that the bigger tradelines can be better. However, the tradelines with limits of $20,000-$34,999 saw the lowest average change, which contradicts this sentiment.

These results are significant because they contradict the hypothesized outcome that a larger limit tradeline always has a more substantial contribution to the credit score than a smaller limit tradeline. This indicates that while larger limit tradelines added to someone’s credit report can have material impacts on the credit score, this is not always the case. Since many factors contribute to a credit score, it is important to fully consider all aspects of a tradeline when adding a tradeline to your reports, not just the tradeline limit.

The change to the credit score is not solely due to the limit of the line that is added. While it is an essential factor, it cannot be thoroughly analyzed independent of the tradeline’s age that is added.

Most individuals do not need to get a specific credit score when moving forward with their financial goals. Instead, they need to fit into a general score range.

FICO scores have five range categories. Credit scores lower than 580 are considered a “poor” score.  581-669 is a “fair” score. 670-739 is a “good” score. 740-799 is a “very good” score. 799+ is considered an “exceptional” score.

The distribution both before and after the tradelines were added to their reports were recorded and analyzed.

Many lenders use the credit scores from all three bureaus to determine an applicant’s score range. This was emulated by comparing the average of the before and after scores for all bureaus together.

Before.

It was found that most participants started the study in the lower categories:

• 34.56% in the poor score category,
• 48.38% in the fair score category,
• 13.68% in the good score category,
• 3.39% were in the “very good” category,
• and 0.00% were in the excellent category.

After.

After the addition of the tradeline, most clients were in the middle to upper credit score ranges:

• 9.68% of clients remained in the poor credit score category,
• 51.90% were in the fair credit score category,
• 27.14% were in the “good” category,
• 10.63% were in the “very good” category,
• and 0.63% were in the “excellent” category.

This analysis shows that roughly 20% of the individuals with poor credit scores improved their credit score by adding tradelines. Additionally, the proportion of clients who had great or excellent credit scores increased from 3.39% to 11.26%.

These factors indicate that the average client saw a positive shift in their credit rating due to the tradelines.

Fitting into a higher credit score category can have many benefits on achieving lending. Higher rates of approval, larger limits granted, and lower interest rates are just a few reasons people try to improve their credit score before applying for funding.

Findings.

This finding implies that the number of participants who qualified for higher credit score brackets increased after the addition of tradelines.