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  • Writer's pictureThe Credit Laboratory - Research Team

Are tradelines legal or illegal?

Updated: Jan 8, 2022

Are tradelines considered to be legal or illegal?

Tradelines are not illegal. No one has been arrested to date for legally adding someone to their credit card as an authorized user or has an authorized user been arrested for being legally added to someone else's credit card. As a matter of fact during my research I have only seen that the process may be frowned upon by some creditors and credit reporting agencies by claiming borrower's are falsely representing their credit worthiness to potential lenders.

FYI: Creditor's make money off of interest. The lower your credit score the more you pay in interest, so why would they want you to do anything to help increase your credit scores if it is going to impact how much money they can make. So I expect them to frown upon it or not like it but that does not make it illegal.

Yes, you have to be careful with your personal information to avoid identity theft or fraud, but that is expected with any financial transaction. You should not be giving your personal information to just anyone, ever!!!

What is a tradeline?

A tradeline is considered as any credit account on your consumer credit reports. A tradeline can be a line of credit, credit card, charge card, auto loan, etc. We will be discussing credit card tradelines and the different types of credit card tradelines in this article.

Types of credit card tradelines.

  1. Primary User - which is considered as the owner of the credit card. The person who is responsible and liable for making all payments on the credit card.

  2. Authorized User - which is someone given permission to have credit card access for various reasons, such as making purchases or payments on the credit card account. Most creditors add the credit card account information to the authorized user's consumer credit report from the time that the account is opened. American Express is one of the few companies that I can recall that does not add past payment history to authorized user's consumer credit report.

Should I purchase a credit card tradeline from anyone?

Whether or not you should purchase a tradeline from someone depends on your personal circumstances. Do you know someone who can add you as an authorized user, and would it help or hurt your credit profile by doing so.

If you are added to a family member's credit card you will need to ensure that their balance is under 10% of their credit limit or it could hurt your credit report instead of helping it. If the account previously had a late payment that information will be reported on your credit reports as well as you will most likely their past credit history for that account will report on your consumer credit reports.

If you have been unsuccessful at getting a primary credit card account or have only been able to get approved for a secured credit card, being added as authorized user will help your credit scores to increase as well as help your odds of getting approved from your own unsecured credit card.

Can being added as an authorized user hurt your credit?

Yes, being added as an authorized user can your credit profile depending on your credit profile and the account being added. If the credit card has a high balance, has missed payments, or hasn't been opened long are all examples of how your credit can suffer from being added as an authorized user.

If you are an authorized user on a credit card and the account suffers a recent late payment, you can asked to be removed as an authorized user and contact the credit bureaus and request the account be removed from your credit report. The credit bureaus will remove the account with little to no question because authorized users are not held contractually liable, so the account will be removed immediately.

Yes, the credit bureaus will remove the account and it will no longer appear on your credit reports. So if you are added as an authorized user on a credit card and the account is negatively impacting your credit score contact Experian, Equifax, and Transunion and request immediate removal of the account.

How long do tradelines stay on your credit report?

How long a tradeline reports on your credit report depends on the owner of the account. Once the owner removes you as an authorized user the account will continue to report on your credit reports, but will report as terminated and will no longer report monthly.

FYI: Positive tradelines remain on your credit report for 10 years after you make your last payment.

How much will a tradeline boost your credit scores?

How much a tradeline will boost your credit scores depends solely on your credit profile and the history of the credit card tradeline. If you do not have a credit card account opened or your credit utilization is above the recommended 10% of your credit limit, being added as an authorized user could increase your score 50 to 100 points or more.

Credit utilization is 30% of your credit score which is roughly 165 points. If you do not have a credit card opened with a balance under 10% of your credit limit your credit report is suffering, and you are not receiving any of those points on your credit reports.

So been adding as an authorized user can help you maintain a lower credit utilization, as well gain positive payment history on your consumer credit reports.

Conclusion: Are tradelines legal?

There is not text that states tradelines are legal or illegal, only that they are frowned upon by creditors and considered as getting positive payment history for credit that you did not earn yourself.

Is it illegal to add a family member as an authorized user - NO.

Is it illegal to add a non-family member as an authorized user - NO.

Some creditors will stop you from adding others as an authorized user if you add and remove to many people in a specific timeframe, normally within a year. The primary owner of the account is responsible for any charges made on their account even by an authorized user.

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