Trade Line

Ever wonder how credit agencies seem to know your entire credit history? Bought a home? Had some late credit card payments. Finished paying off those student loans? The credit agency has all that info at its fingertips.

Credit agencies collect credit information on you every time you make a credit transaction. That information, passed on from your lenders to credit reporting agencies, is called a trade line. The trade line is a record of all credit activity for each credit account under your identity.

Trade lines are used by credit reporting agencies to give you, the borrower, a credit score, like a FICO score. Credit scores signal to potential lenders if you have your, um...poop in a group...or not. The lower your credit score, the higher the rates and offers you’ll receive, since you appear to be a greater risk.

Maybe you did a really bad job with that one credit card, paying late on the reg, and you'd like to erase its trade line. You can delete that credit card account...but the trade line for it will still show up on credit agencies’ reports for at least three to five more years.

Better get on that now, then.