Selling tradelines sounds like a way for anyone with a good credit score to make extra cash. You are essentially sharing your good credit with someone else for a fee. If you have a good credit score, it takes only minutes to start selling tradelines. In under two hours a year, you could make $500-$10,000. That easy income comes with potential downsides that you should consider before making a move.
You risk being scammed or linked to criminal activity. You can also hurt your credit score if one of your accounts ends up being closed. The legality, both for the buyer and the seller, is also questionable. We’ll take you through the risks and benefits of selling tradelines.
In this post:
What Are Tradelines?
Tradelines are credit accounts or debts listed on your credit report. Each account is a separate tradeline. If you have five credit cards, you have five tradelines. Tradelines are also given for mortgages and other debts, but it is credit card tradelines that are bought and sold.
The tradeline includes information about the debt or line of credit, as well as the type of the account, lender’s name, the date the account was opened, monthly and current balance, payment history, and a partial account number, like the last 4 digits of your credit card.
Why Buy and Sell Tradelines?
Credit bureaus use tradelines to calculate your credit score. A credit card tradeline that uses a low percentage of its credit limit and is consistently paid on time will boost your credit score: the older the tradeline, the greater the credit boost.
Someone with a good credit score can add an authorized user to increase the new user’s credit score. Many users add a young adult child or spouse to a credit card to boost their credit score. This is where the concept of selling tradelines originated.
Now, instead of adding a child or spouse, you can sell the opportunity to use your good credit to a stranger. They might be applying for a mortgage or a loan, and the increased line of credit and associated credit boost could save them thousands of dollars through more favorable terms or a lower interest rate.
📘 Learn more about how tradelines work and the pros & cons of buying tradelines.
How to Sell Tradelines?
Selling tradelines means adding an authorized user to your credit card for a set fee. The user will usually stay on your account for about two months, after which you will be told when you can remove the authorized user.
The price you receive for selling tradelines is based on your total credit score, the age of the card, and its credit limit. Some banks or credit card issuers are also considered more favorable for their reporting practices and will command a higher price.
👉 How selling tradelines works in 5 steps:
- Research and choose a tradeline broker.
- Decide which credit cards you want to sell your tradelines on.
- Wait for a broker to connect you with a seller. You will usually get an email with further instructions once this happens.
- Add the authorized user to your card.
- Remove the authorized user from your card. You will, again, be notified when you can do so.
How Much Can You Earn From Selling Tradelines?
The amount of money companies claim you can earn from selling tradelines varies greatly. It goes from $50 to $350 per authorized user per month.
Exactly how much you can earn from selling tradelines will depend on four different factors taken together:
- The card issuer. Which card issuer is most favored varies as bank policies change, but generally, Barclays, Discover, Capital One, Chase Bank, Bank of America, or Elan are preferred.
- Your credit limit. A card with a credit line over $20,000 will earn the most.
- The age of the tradeline. A card that is more than 10 years old is ideal. 18+ years will command the highest prices.
- Your credit score. Generally, you will not be able to sell tradelines with a credit score under 700. The higher your credit score, the greater the price per tradeline sold.
👉 For example:
If you have five credit cards, each over 10 years old, and with a credit limit greater than $10,000, you could earn $250 to $300 for one authorized user per card every two months.
That comes out to $7500 to $9000 per year by changing the cards you use each month.
The only time invested is the few minutes it takes to add an authorized user, and another few minutes to remove the authorized user two months later. The small time investment for big returns is what makes selling tradelines seem like an attractive added income stream.
Is Selling Tradelines Legal?
Selling tradelines is not technically illegal, as of early 2021. Legally, as a credit card holder, you can add anyone to your credit card. Accepting payments for adding someone as an authorized user is also legal.
However, it is frowned upon by both banks and credit bureaus. Those buying the tradelines can be seen as deceiving the lender or even committing bank fraud. When selling tradelines, you risk violating your credit card terms of service. This can lead to your account being shut down, which can affect your own credit score.
Risks of Selling Tradelines
Selling tradelines involves risks. The risks include everything from identity theft to links to criminal activity. The main risks of selling tradelines are:
- Violating your credit card company’s terms of service. If this happens, they have the right to cancel your account, reducing your total credit lines and potentially hurting your credit score.
- Assisting in identity theft. Someone can create a fake ID and buy a tradeline to legitimize it. While it might seem like you’re helping someone less fortunate boost their credit score, you might be helping to steal someone’s identity. There is no way to know who you are selling the tradeline to or their reasons for buying your tradeline.
- Unauthorized purchases. As an authorized user, the tradeline buyer could request a card sent to their address and make charges on your card.
- Assisting in bank fraud. Banks and credit bureaus go to great lengths to ensure that credit scores reflect the user’s earned credit. Buying tradelines can be seen as a type of bank fraud or deception.
- Data breaches. Selling tradelines can increase your risk of data exposure or identity theft.
- Accounts shut down. If a bank sees that you have added too many authorized users — usually more than four to six — they may flag your account or shut it down. You risk a lowered credit score, especially if that was your oldest or largest line of credit.
💡 Look into other, safer ways of making extra money.
If you do decide to sell tradelines, you can protect your identity and prevent unauthorized transactions by requesting that the new card for the new authorized user be sent to your address. Set up two-step verification with your bank to prevent the new user from requesting a card directly with the bank.
While this will prevent the tradeline buyer from making charges on your account it will not alleviate other risks.
Does Selling Tradelines Affect Your Credit Score?
Selling tradelines will not directly affect your credit score. The new authorized user will only benefit from your credit score, not harm it. However, if you have an account closed from selling too many tradelines, your credit score could be affected.
Do you have any questions about selling tradelines? Let us know in the comments section below!