Trade Line – Evaluating A Borrower’s Credit Score Report

For every loan, activity extended to a borrower and reported to a. Credit reporting agency. This record is called the trade line. This means that a tradeline will be established on a borrower’s credit report when a borrower is approved for credit. This will contain all the activities based on the account of the borrower.

Massively, tradelines are used by credit reporting agencies to. Evaluate a borrower’s credit score. Continually, the established credit. Score for a borrower gives different weights to. The activities of the tradeline.

Trade Line - Evaluating A Borrower’s Credit Score Report


  • For a tradeline to be created for a borrower. He/she must be approved of a loan and having the trade line to. Keep account of their activity.
  • Tradelines comprise the information of the creditor.  And the type of credit given.
  • Even after a credit transaction is closed. The trade line still remains on tradeline till after seven years.

Tradeline is typically a tracker that records the activity of borrowers over credit reports. Every credit transaction has its own trade. Line on the credit report so as to represent the individual credit accounts that are approved. The simplest form of accounts is basically the. Type that is paid off in fixed installments E.g. car loan, and mortgage, revolving accounts such as credit cards. Or open accounts where full payment is made for the receipt of goods.

A Tradeline may contain a variety of different data. Files related to the creditor. And basically, the type of credit approved. The required data from a creditor is the name, the account; the responding party entitled to. Pay the loan, and the payment term of the account.

In case the credit is extended, the credit limit and the payment history. At all level of delinquency, and the total amount owed according to the. Last report will be reported in the trade line. Whenever the account is been closed. That record remains on the credit report of the borrower until seven-year. Sometimes, it may disappear earlier.

Also, over this tradeline, the payment status reflects all the payment activities. Both the early payments and late payment according. To the terms of the credit agreement. If there is no payment at all. It is reported on the payment status. Reflecting that there was no payment for some specific periods.

The late payment is considered into a group

Interestingly, according to the range of days and how late they are. The payment status may be set to charge off instead that the debt will be repaid. The tradelines as well indicate the credit recipient has entered. Bankruptcy under the payment status.

Also, the credit score varies and can be determined from the trade lines especially. By the reporting agency that needs it. To develop an individual’s credit score. Higher credit scores will. Give individuals favorable trade line reports.  Tradeline is one of the factors considered in calculating the credit score. Others include types of trade lines, lengths of open accounts, and payment history.

Lastly, lenders verify the credit score of the. Borrower from the trade line. Over the reporting agency in order to reduce credit risk. Especially when considering a credit application still under the underwriting stage.


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