Know What Is a Tradeline & How You Can Check Your Credit Score?

All your credit reports have a separate tradeline for every credit account, which shows the account’s nature, credit payment history, date when credit is disbursed etc. All information presented in tradelines is utilized to determine your credit score.

What is a tradeline or a credit tradeline?

A tradeline is a record of the credit activities of the users. Credit reporting companies use the term ‘tradeline’ for delineating the users’ credit accounts on a credit report. A tradeline is established when any user gets credit approval.

∙       Tradeline records all your credit activities involving the credit account nature, overall credit amount, number of accounts etc.

∙       Every credit account comes with a separate tradeline. For instance, if X holds four credit accounts, his report might show four separate tradelines showing the credit provider’s details, payment history, the overall debt amount, etc.

∙       Tradeline carries all details such as payment status, lender’s details, date of opening credit account, address, overall credit amount etc.

∙       Tradeline is available on credit reports and is used for computing the credit score of the user.

What are the major tradeline components?

Tradelines are formed based on users’ overall number of credit activities and accounts. Credit bureaus such as TransUnion, Experian, and Equifax use the tradelines to decide your credit score. Tradeline consists of the listed –

∙       Address and name of credit borrower

∙       Borrower’s partial account number

∙       Borrower’s occupation

∙       Date when the account came into function

∙       Kind of account – credit card or loan

∙       Date of user’s current credit activity

∙       Current balance and credit amount

∙       Interest rate, minimum monthly payment, payment frequency, last payment date etc.

∙       Credit payment history

∙       Sanctioned amount, credit card limit, amount overdue, and current balance

∙       Account responsibility

Note that every credit bureau like Experian, Equifax, and CIBIL uses the credit report in a different manner. Hence, there may be few variations in credit reports.

What are the tradelines used for?

Being a part of a credit report, the tradeline is used to create your credit score. Lenders use the tradelines along with the user’s credit profile to compute the credibility of the user.

Why is it crucial for you to check the tradeline?

As the tradeline is used for creating a credit score, any mistake, error, or fault in it can have a negative impact on your score. Hence, it is crucial to review your tradeline to authenticate the details included in it and fix any issue or raise a dispute for it. Apart from this, seekers can also ask to remove the tradeline if any of your credit accounts are not being used by them.

Every credit line comes with a separate tradeline, and every tradeline is shown on your credit report. As an outcome, any error or negative remark in your credit report can massively impact your credit score. Having a negative score can be a major reason behind multiple missed credit opportunities, such as not being able to avail of the desired loan proceeds, higher credit utilization ratio, negotiation power, low rate of interest etc. Hence, regular routine checks on your report are crucial for you to escape the loop. You can know your free CIBIL score from lending online platforms or the CIBIL bureau. However, note that for you to avail of your yearly CIBIL report, you must ensure you complete the CIBIL login registration.

How should you read your credit report?

A credit report shows the listed info and can be used by lenders and financial institutions to decide whether to sanction your credit or loan. The crucial data on your credit report include:

∙       Number of credit accounts

∙       Date of opening credit accounts

∙       Overall credit amount

∙       Borrower’s payment history

∙       Credit payment until the date

∙       Any credit inquiries or bankruptcies

∙       Lender’s details

∙       Seeker’s identifying info (name, social security number, address etc.)

Reading your credit report is a process which is time taking because it details all your credit info. Hence, ensure to follow the tips carefully to properly read your credit report. Note that – each of the four most popular credit bureaus like CRIF Highmark, CIBIL, Experian and Equifax, use credit reports in a different manner. Hence, there are chances that you may detect a few minor variations in your report. 

Identifying or personal info

Personal info in your credit report contains your name, address, occupation, previous and current account info, date of birth, email address, kind of credit availed, ownership details etc.

What must you check?

As a borrower, you must check your personal details thoroughly. There must not be any credit account opened in another’s name, namely your children, spouse, parents etc. Ensure to check for typos, spelling mistakes, unrecognizable or unfamiliar addresses, phone numbers and others that do not belong to you. Make sure you report such data to the credit bureau in the case of discrepancies. Remember that credit bureaus cannot make any changes to your credit report without getting in touch with the financial institution.

Credit history

It is a part of the credit report, which is extremely detailed. This contains all your credit-linked data like current balances, payment history, lenders and borrowers’ details, closed and current credit accounts etc. Depending upon the credit report, a credit score is computed. Hence, it is essential to evaluate your credit history in a proper way.

What must you check?

Ensure to thoroughly review your credit balance, account number, account name, due date, payment status, payment history etc. Ensure to cross-check your present credit limits or original loan proceeds. Also, ensure to check the listed errors, if any, to resolve them as soon as possible –

∙       Open accounts reported as delinquent

∙       Accounts that are shown as open and closed

∙       Credit accounts have excellent repayment history but maybe marked erroneously as delinquent.

∙       Credit repayments mentioned as late, but you paid all the dues on time

∙       Report indicating incorrect balance

∙       Shown as an unidentified account

Why is a credit report important?

A credit report is a visual representation of your financial health. A report is crucial because it is considered by financial institutions and lenders when approving your loan or credit application. This either increases or lowers your chances of availing of credit-linked opportunities.A strong credit score comes with various benefits like a lower rate of interest, higher credit card limits etc., while a poor or bad credit score is the major reason behind loan application rejection. Anything done by you reflects upon your credit report. Moreover, comments, remarks or errors on your report make your situation worse because they can negatively impact your credit score.