What is a tradeline? The accounts your mortgage score is built from

What a tradeline shows

Each account a lender or creditor reports to the credit bureaus becomes a tradeline. It usually shows:

• who the creditor is and what kind of account it is;
• the date it was opened, and the date it was closed if it has been;
• the credit limit, or the original amount of the loan;
• the current balance, as last reported;
• the account’s status: open, closed, paid, or past due;
• a month-by-month record of on-time and late payments.

Your credit report from each bureau is, in effect, a list of your tradelines. Each bureau keeps its own list, so the three can differ slightly.

The kinds of tradelines

• Revolving accounts, such as credit cards, let you borrow up to a limit and pay it back over and over.
• Installment accounts, such as car and student loans, are paid down on a set schedule.
• Mortgage accounts are installment loans secured by a home.

Collection accounts can also appear on a report, reported by the collection agency.

How tradelines shape a mortgage score

Mortgage lenders mostly use Classic FICO scores, and every part of those scores comes from your tradelines:

• Payment history: whether your accounts have been paid on time.
• Balances compared with limits: how much of your card limits you are using, as of the balances last reported.
• Age: how long your accounts have been open.
• Mix: the different kinds of accounts you have.
• New accounts: how many you have opened recently.

That is why two people with the same number of accounts can have very different scores, and why one account reported out of date can pull a score below where the facts put it.

When a tradeline is out of date or wrong

Tradelines are not always current. A card you paid down two weeks ago may still show last month’s balance. An account you paid off may still show a balance. An account that isn’t yours may appear by mistake.

If you are about to apply for a mortgage, a loan officer can check your tradelines before the lender relies on them. When something needs updating or correcting, the loan officer can request a Score Express rescore. It updates the information with the bureaus, usually in a day or two, at no cost to you. A rescore changes the information on your report, never the score directly, and it cannot remove information that is accurate.

You also have the right to dispute anything on your report that is wrong directly with the credit bureau. That process can take up to about 30 days. If you are close to applying, ask your loan officer which route makes sense first.

A caution about buying tradelines

You may see offers to “rent” or buy a tradeline: paying to be added as an authorized user on a stranger’s older account so your score goes up. Mortgage lenders and underwriting systems can treat authorized-user accounts that are not really yours differently from your own accounts, and your application has to describe your credit accurately. Before adding or removing any account to change your score, ask your loan officer how it would be treated for your loan.