Should you add Tradelines to your credit report?

by Michael Brands Dec 12, 2021

Every business credit report showcases how worthy such a business is for a credit facility. It has nothing to do with the running of personal accounts of the owner but the flow of credit into and out of the business itself. Hence, a business credit report is very important for a business that would seek expansion through credit facilities.

In this regard, Tradelines play a pivotal role in making the credit report substantially believable and authentic. They provide information on how you have handled credit in the recent past.

What are Tradelines?

You may be thinking - Tradelines? Yes, Tradelines are very powerful features of any credit report. A Tradelines is a simple terminology used by credit report agencies to describe the business credit accounts that are listed within a credit report. To better understand it, for each of these credit accounts available in
the report, there is a tradeline showing who the creditor and debtor are.

Tradelines also includes all information about the credit account; lender's name, address, account number, status, current balance, account opening and closing date, payment history and so much more.

Tradelines enable you to view this information about each of the accounts once such an account is
viewed.

A perfect understanding of how Tradelines work can put you at the advantage of a great credit score.

Who should use Tradelines?

Research has shown that only a small percentage of businesses around the world utilize Tradelines for their business. This could be a result of so many reasons.

Firstly, not all businesses have the required assets and collateral to seek credit from financiers. Hence, they just stick to sustaining their business with their own finances and once you do not see credit from somewhere else apart from yourself, there is no need to utilize Tradelines.

However, it is worthy of note that any business (big or small) can use Tradelines, all they need to do is
show commitment to meeting their financial obligations on time.

Why do you need Tradelines in your credit report?

We believe you understand what a Tradeline is? So, how then is a Tradeline important in the computation of your credit report; adding to its worthiness and authenticity. Well, the following
headings will help you understand the importance of Tradelines better

1. Quick Credit Approval

Many credit givers and business financiers have grown to be very cautious about how they risk their
money on any business. This has reduced the rate at which approval is given on credit Applications of
any kind.

Since Tradelines show your past credit activities, how you have repaid and handled your credit facilities in time past, it will be easier for the new creditor to trust your ability to make repayments on the new credit to be acquired. It is less likely for companies to risk their finances with a business that has no prior
credit history. So, Tradelines help establish your proven credit history and gives such a company the confidence that you surely will make repayments as and at when due.

2. Better credit scoring

A credit score clearly shows the creditworthiness of an individual or business. It is the numerical expression of a business or personal credit file. For easier understanding, a credit score shows how likely you are to repay a loan if it is granted to you.

For any business to thrive in this modern time, you need to have a great credit score. Expansion through credit sourcing cannot be possible if your credit score is low - as a low credit score reduces your chancesfor credit approval. With Tradelines, your creditworthiness is greatly increased and gives your financiers the confidence they need to risk their monies with your business.

3. Better Business Insurance Rates

Most insurance companies are on the lookout for businesses with very poor credit scores and once they identify this set of companies, they will not do business with them. If you are without Tradelines, then this will work against you. Tradelines help boost your credit report as we have earlier stated. This in turn will open your business up to better insurance rates from providing companies. With a good credit score, your business will be first to qualify for an insurance cover since these companies will have the confidence that you will not fail to pay your subscription fees.

4. Opens you up to a profitable partnership

It is not very rampant for businesses to consider creditworthiness before going into partnership.

However, a big business will want to see how responsibly you run your business before going into partnership with you. To such companies, payment of debts on time and positive credit activities is
enough proof that you run a profitable and responsible business. Tradelines help establish these facts for your partners and guarantee that business partnership.

5. Lower interest rates

Credit scores usually range from 300(lowest) to 850(highest). This disparity can make a big difference in
the confidence level a credit company has towards your business. A credit score of above 600, gives your financier all the needed confidence to trust you with the credit and expect repayment at when due.

This way, they can also offer you very low-interest rates on the credit acquired since your credit history establishes your competence

With Tradelines, this becomes easier because it places you at the advantage. How? By boosting your credit score to a point above 600 points which qualifies you for a lesser credit interest rate.

Have you never thought of Tradelines as an important factor to consider in regards to credit acquisition? Thought it was going to be business as usual - walk up to your financiers and just make your request?

Well, we believe now you know the importance of having Tradelines in your credit reports. The benefits
of Tradelines go beyond the above-listed points.

Avoid Buying Tradelines!

Of course, buying Tradelines is technically accepted but we do not consider it ideal. If the credit company figures out that the Tradelines in your credit report is not one you actually built yourself, you could be blacklisted. Blacklisting prevents you from gaining credit facilities from other credit companies.