I was asked to the other day, “what does a tradeline do?” It’s an interesting question, because tradelines have a definition but they also do something depending on certain circumstances. Let’s discuss both really quickly.

As we’ve explained in other articles, tradelines are accounts that appear in your credit report. It’s basically a report of your payment history inside of your credit report. This can be payment behavior on car loans, mortgages, credit cards, etc. Despite this definition, this only describes what tradelines are and not what tradelines do.

If someone is asking what trade lines do, they’re referring to the practice of piggybacking credit. Here’s what tradelines do: they impact your credit score, preferably in a good way. How do they do this? And, How do we make sure they impact your credit score in a good way?

Typically, this is achieved by adding authorized user accounts to your credit report. You inherit the history associated with those accounts. This is called piggybacking credit. If you’re added to an authorized user account with pre-existing history and positive standing, such as no missed payments as well as a high limit and low balance, it is likely to improve your credit score. We’ve studied the impact of trade lines over the years with over a thousand study participants and we’ve shown you the results on what you should expect.

Please comment below with any questions.