Understand how to choose the best trendline
If you are just starting out in the business world, we recommend taking a look at our Tradeline 101 infographics to get down to the basics before deciding to buy credit tradelines. If you are already familiar with the concept of tradelines and want to learn how to choose the best tradelines for sale, then this tradeline buyer’s guide is for you.
When shopping to buy a tradeline, there are basically two main variables to consider:
(1) the age of the trendline, and
(2) Tradeline credit limit.
All other variables should be in equal amounts, including perfect payment history, low usage (15% or less), account type (usually a credit card), and account reporting date.
Mostly, if you have purchased from a reputable tradeline company, you should consider the name of the bank, except in cases where you may be blacklisted from that bank for filing bankruptcy or collecting unpaid fees from that bank.
So, considering only two variables, why is it so challenging to choose the right trendlines? The answer is that most people’s credit files are fairly complex because of the depth of their credit history. People have numerous data points in their credit files and all of this data somehow plays a role in calculating their credit score.
Each person’s credit file is unique, making it very difficult to discuss how tradelines can affect an “average” person. Additionally, there are multiple different credit scores, each with its own closely guarded algorithm that considers a very large amount of data points in someone’s report.
Let’s discuss each of these variables individually, starting with credit limits.
In most free credit score simulators, you can only change a very limited number of variables. So when trying to guess how a tradeline can affect your credit score, it usually only lets you enter a new credit limit amount, and then it makes an estimate of a new credit score.
The Credit Score Simulator (sometimes known as the Credit Score Calculator) assumes that you are opening a new credit card regardless of the type you type. Basically, it’s just looking at your overall usage ratio, and not taking into account the age you’re considering you will gain by adding a mature tradeline.
As far as usage, many professionals would suggest that you ideally want to stay below 20%. From our experience, we have seen that the use scores of 30% – 40% or higher pull down credit scores.
The higher the usage ratio, the lower your credit score, although these accounts are always paid on time. Most credit experts recommend keeping your overall usage ratio to less than 20% or less.
However, examples become more complicated in situations where someone has different credit cards with different usage ratios.
For example, let’s say someone has seven established credit cards, two with zero balance, two with 50% usage, one with 75% and the last two are completely maxed out.
Sure, buying a few trendlines with a higher limit may be able to lower the overall target to 20%, but that doesn’t remove the fact that the person still has five credit cards with high usage and each of these five cards has a lower credit score due to higher personal usage.