As a consumer, understanding the different aspects of your credit score is critical. Not only can this ensure you understand how your credit score will impact certain financial decisions you make, but it can also help ensure you are able to recognize when errors appear on your report so you can take the necessary steps to remedy these mistakes. One aspect that many are unfamiliar with, however, is tradelines. If you’re unsure what these are or the impact they can have on your credit report, this blog can help you explore what you should know. You’ll also discover how a California credit report lawyer can help you fight the inclusion of incorrect information on your report.
What Are Tradelines and What Impact Can They Have on My Credit?
A tradeline is used to describe any form of credit that appears on your credit report. Not only will your credit report list each tradeline in your name, but it will also include a considerable amount of information regarding the account, such as the date it was opened, when your last activity on the account was, payments made, negative information regarding the account, and its current balance.
Your tradelines will impact a considerable amount of your credit score, with any late payments on any account having the most significant impact. Late payments make up about 35% of your FICO credit score, and negative information will remain for seven years. However, it’s impact over time will lessen as your borrowing history improves.
What Are the Types of Tradelines?
There are generally three types of tradelines that will appear on your credit report. The first are revolving lines. These represent any debt that has a credit limit that you can pay down to increase how much you can borrow. As such, there are no fixed limits on this amount, and you will have a minimum payment you must make each month as determined by the conditions set forth by the creditor. Most commonly, a revolving credit will take the form of a credit card.
The next form of tradeline you may see on your credit report is an installment line. These involve fixed loans that you will pay off in monthly installments at a consistent amount. These most commonly include loans like auto loans and mortgages.
Finally, you may notice collection tradelines. Any time a debt is sent by a creditor to collections, it will appear as such on your credit report. It’s critical to note that this is in addition to the original tradeline. For example, if you are behind on your credit card payment and the creditor sends you to collections, you will still have the credit card tradeline as well as the new collection line included in your report.
As you can see, tradelines can have a considerable impact on your credit, which is why it’s critical to connect with an attorney if you notice incorrect information that negatively affects your credit score. An experienced attorney with Loker Law, APC, can help you remedy these issues to ensure that your credit report is accurate so you can protect your best interests and finances. Contact us today to learn more.
