While the average credit score nationwide has risen to 716, millions of people are still hoping to boost their credit scores. There are multiple reasons why people look for ways to positively impact their credit scores.
Some are building credit for the first time, while others are rebuilding after events or decisions have significantly lowered their credit scores.
However, the process of building credit can be long and move too slowly for people who are ready to move on with large purchases and life changes. One strategy that has the potential to deliver significant credit score boosts is purchasing tradelines.
But often, people looking for access to this credit tool don’t know where to begin and may not know who to trust. Additionally, people with good credit who are willing to sell their tradelines might not know how to find customers or what the process entails.
Brokers can be the vital link between buyers and sellers of tradelines and ensure the process goes smoothly and benefits everyone involved. Buyers can improve their credit, leading to more freedom and purchasing power, and sellers can realize significant profits while helping others.
Becoming a tradeline broker can bridge the gap and help both sellers and buyers, but it can also become a flexible and successful business for the broker. However, many people are unsure how to become a tradeline broker or try to jump in without doing any homework first.
Although anyone can sell tradelines or become a tradeline broker, this freedom may not translate to success without a solid understanding of what tradelines are and how the process works.
Let’s quickly review what tradelines are.
What Are Tradelines?
Credit reporting agencies coined the term tradeline. This word refers to each credit account that a credit agency lists on your credit report.
The tradeline includes vital information about the debt and the creditor, type of account and when it was opened, and a current balance and date of the last activity.
It may also include the monthly payment amount, payment history, or the date the account was closed. There are two kinds of tradelines depending on the type of credit they involve:
- Installment tradelines: Installment tradelines involve a fixed amount of money, and the borrower makes regular monthly payments of a certain amount until the balance is paid. Variable interest rates can affect the amount of the installment tradeline, and they often last for months, years, or even decades. Some examples of installment tradelines include mortgages or car loans.
- Revolving tradelines: Revolving credit interest rates can fluctuate, and consumers can pay down debt each month and then use the line of credit for more charges. This debt is called revolving because consumers can carry the debt balance over to the next month without paying it off in full. Credit cards are the revolving tradelines with which most people are familiar.
Tradelines contain critical information that lenders and others access when determining your creditworthiness.
What are Authorized Users?
When we are talking about buying and selling tradelines, we are generally talking about lines of credit like a credit card. People who have a credit card may already be aware that they can have more than one authorized user (AU) on the account—in some cases, up to five.
Selling a tradeline is essentially offering one or more people the opportunity to take advantage of a person’s excellent credit history and become authorized users on a credit card for a period of time. And while the concept seems simple, there are specific conditions sellers must consider and a great deal of risk in working with tradelines without any experience in the industry.
Additionally, some sellers and buyers do not operate in good faith. So how can someone get into the tradelines industry successfully? Many choose to become tradeline brokers.
What Is a Tradeline Broker
A tradeline broker is an intermediary who links buyers and sellers. Many people are hoping to learn how to become a tradeline broker because they believe that both the process of becoming a broker and buying and selling is easy.
However, while it is true that tradeline brokers do not need any special licensing or certification, failing to understand the process and industry can lead to a potentially significant loss.
People who are interested in becoming tradeline brokers can benefit from learning as much as they can about the credit industry and the process of working with tradelines. It’s essential to know what activities can push a credit score up or down in order to give valuable advice and make the best connections to clients.
Potential brokers who are not already involved in the credit industry in some capacity can benefit from undergoing training before becoming tradeline brokers. There are many resources for learning more, from in-person and virtual courses offered by tradeline wholesalers to online articles and videos.
How to Be a Successful Tradeline Broker
Once a person is more comfortable with how tradelines and credit work, it’s time to get started and learn more about becoming a tradeline broker.
Many tradeline brokers aren’t sure where to buy authorized user tradelines for clients. Wholesalers can be a tradeline source, but it’s important to affiliate with a wholesaler who can offer quality tradelines.
A tradeline broker is more likely to be successful when they can provide clients with AUs with excellent credit who are reliable and won’t suddenly miss a payment or close the line of credit before the client has had a chance to improve their credit score.
Be careful when working with tradelines. The practice of buying and selling tradelines is legal, but not every credit card allows this practice. Brokers that do not work with a tradeline wholesaler must take care to avoid trying to sell tradelines for credit companies that do not allow it.
They must also ensure sellers do not add too many AUs to a line of credit, which could cause the credit company to shut the credit line down, negatively impacting the seller and the AUs on the tradeline.
What Are Wholesale Tradelines
Brokers who are building a business and clientele will benefit from having access to many tradelines so they can offer their clients the best fit and a greater chance of credit improvement. There are many companies that provide tradelines both in bulk and at a discount.
Both of these methods are considered wholesale tradelines. Wholesale tradelines also reduce the risk of buying and selling tradelines for credit companies that do not allow the practice.
Often these companies also offer these tradelines with some security or guarantee that the buyer will see a credit score improvement post to at least two out of the three reporting agencies within a specified period of time, or they’ll receive their money back.
This provision is key to offering reassurance to clients and minimizing the risks. Brokers who are hoping to purchase wholesale tradelines should also look for other features from wholesalers, including available customer support and transparent pricing information.
Wholesale Pricing and Broker Programs
And when it comes to pricing, brokers must take care to do their homework. A wholesaler might offer a discount off the price of the tradelines based on the broker meeting certain conditions, but the discount could end up being more of a gimmick than actual cost savings.
Other wholesalers prefer to issue a flat pricing structure. Brokers should compare pricing as well as the support features a wholesaler offers before purchasing tradelines. While it’s easy to get excited about a 30 percent discount, a transparent pricing structure and the process can lead to far more significant cost savings.
Another way that many brokers get into tradelines is through an affiliate program. In affiliate programs, brokers pay fees, often quite high, in return for varying discounts on tradeline purchases.
However, affiliate programs can end up costing the broker more than they save, so some companies like Tradeline Works do not offer affiliate programs and prefer to create partnerships with brokers.
Building Your Tradeline Business as a Broker
Many companies that provide advice and credit-improving services work with tradeline brokers to reach clients interested in buying and selling tradelines. Although buyers and sellers may be tempted to forgo the broker and associated fees, there are risks connected with going it alone.
Selling your own tradeline does avoid the middleman but also requires the seller to do all of the prospectings and follow up with clients. And selling your own tradelines could result in you earning far less than those tradelines are worth.
If you’re interested in selling other people’s tradelines for them, then you are reselling tradelines. Tradeline resellers can provide the broker with the benefit of ready access to tradelines with no overhead costs.
Buyers hoping to improve their credit can feel more confident in the broker’s ability to match them with a tradeline that will boost their credit if the broker is partnered with an agency.