Will a Boostline Improve Your Credit?
What to Know Before Becoming an Authorized User
Buying a boostline can be a powerful way to improve your credit, but it doesn’t work in every scenario.
While a boostline can help increase your credit score, it won’t make up for derogatory marks on your credit report. Boostlines are most effective when used to build or rebuild credit, but they aren’t a substitute for credit repair.
Before becoming an authorized user on a boostline, you should have a solid understanding of your credit situation, goals, and a strategic plan for how a boostline can help further your objectives.
You also need to understand how credit scores are calculated so you can understand how a boostline will affect your credit score as a whole. Even if a boostline is helpful in one area, it could be damaging in another if you don’t look at the big picture.
In this article, we’ll walk you through the factors that contribute to your credit score and what you need to consider when determining which boostline will be most impactful on your credit report.
Let’s jump in.
What Aspects Of Your Credit Score Need To Be Improved?
The better your credit score, the easier it will be do qualify for a mortgage, secure an apartment rental, or attain loans with favorable interest rates. If your score isn’t where you want it to be, you have some work to do.
The key to successfully increasing your score with a credit boostline is choosing one strategically. Before you begin shopping for a boostline, you should know precisely what your goals are and which aspects of your credit score need to be improved.
As you know, the following factors contribute to your credit score:
- Payment history (35%)
- Length of your credit history (15%)
- Recent credit inquiries (10%)
- Credit mix (10%)
- Credit utilization (30%)
The credit data you borrow when purchasing a boostline can help improve your payment history, credit utilization, and length of credit history. Review your credit report carefully to determine which of these aspects of your credit score could use improvement. This will guide you toward selecting the appropriate boostline.
If any of this information is new to you, review our guide to how credit works to ensure you understand how your credit score is calculated.
Payment History Is a Top Priority
Does your credit report show derogatory marks such as late payments or accounts that have been settled after being charged off? Since your payment history makes up 35% of your credit score, improving this area will increase your score significantly, and a boostline can help.
Before investing in a boostline, review the payment history of the account. Knowing that payment history is your top priority, shop for a boostline with an impeccable payment history so you can piggyback off the account owner’s excellent credit. Even one missed payment in the past can hurt your credit score, so you never want to invest in a tradeline that doesn’t have a perfect payment history.
At CreditBull.com, we vet the boostlines available through our marketplace to ensure they have clean payment histories, but you should still do your due diligence to ensure we didn’t miss anything.
Consider The Age Of the Boostline Account
The length of your credit history accounts for 15% of your overall credit score. The longer your accounts have been open, the higher your score. If you’re in a hurry to improve your credit score, investing in an established tradeline might help you increase your credit history length without having to wait years and years.
Even if increasing the length of your credit history isn’t your main goal, you must consider the age boostline you purchase. Purchasing an account that is too new could impact your credit score negatively.
To positively impact this area, the boostline you select should be older than your existing accounts. Generally, an account that has been open for under two years is still considered “new” when it comes to your credit score, whereas an account that has been open for over two years is considered “aged” or “seasoned.”
The average ages of your credit accounts also come into play when determining your credit score. So, if you have one seasoned account and several accounts under two years old, your average account age is likely relatively low.
In the same way, the credit scoring algorithm will also consider the ratio of aged credit accounts versus new ones. So, if you have two aged accounts and two newly-opened accounts, that is more favorable than having one aged account and three brand-new accounts.
Before purchasing a boostline, calculate how the age of the boostline account will affect the average age of all your accounts. Then calculate the ratio of aged accounts to new ones. Would the boostline improve your numbers or bring them down? Call CreditBull: 1-888-982-2855, we can help figure out what may be best for your situation.
How Will The Boostline Affect Your Credit Utilization?
Your credit utilization refers to the amount of debt you carry in relation to the amount of credit you have. It is generally said that you should never use more than 30% of your available credit, as exceeding that threshold may cause your credit score to fall.
If you are carrying high balances on your existing credit cards, a high-limit boostline can help bring your overall credit utilization ratio back into a more favorable range.
However, when it comes to increasing your credit score, it’s not quite that simple.
The credit score algorithm also considers the number of cards you hold with high balances versus those with low balances. Having several credit cards that are maxed out and just one with a small balance is less favorable than if the same amount of debt is distributed evenly across your credit cards.
In some instances, it may make more sense to pay down your existing credit card balances than to purchase a boostline for the sake of improving your credit utilization ratio.
However, if you choose your boostline carefully, it can favorably affect your credit profile in many different areas, making it more beneficial than simply paying down debt.
What If You Need Credit Repair?
If you have charge-offs or delinquent accounts on your credit report that remain unresolved, purchasing a boostline probably won’t raise your credit score. While a boostline can assist you in rebuilding your credit, you should first take steps to begin repairing your credit before you do that.
To repair your credit, set up payment plans to resolve or settle charged-off accounts. You might consider consolidating your debt to streamline payments and take advantage of opportunities for lower interest rates. If you have delinquent accounts, work with your lenders to create payment plans to bring your accounts up to date. Until you take those steps, a boostline won’t be effective in boosting your score.
Once you bring your delinquent accounts up to date, you can begin rebuilding your credit by creating positive data for lenders to see. Boostlines are a great way to accelerate that process.
What If You Already Have Good Credit?
If you already have good credit, it might be challenging to see an increase from purchasing a boostline. If you have perfect payment history and a couple of accounts that have been open long-term, you might struggle to find boostlines that are stronger than your existing accounts.
In this instance, a boostline may not improve your score very much. You might be able to jump a few points, but it might be more impactful to increase your score using other strategies. For instance, diversifying your credit mix by introducing a new type of loan or paying down some existing debt could lead to a more significant increase in your score.
That said, if you’re really close to moving into the next credit threshold, say, from Fair to Good or from Good to Excellent, purchasing a boostline could give you the few points you need to reach the next tier.
The Bottom Line: Who are boostlines best for?
For those whose credit score is suffering due to delinquent accounts or accounts in collections, a boostline probably won’t help improve your credit score at all. If this is your situation, your money is best spent resolving those accounts. When you’re ready to start rebuilding credit, purchase a boostline to kickstart your progress.
Boostlines are most effective for improving your credit score if you have a limited credit history or a few late payments in your credit report. They can also help you improve your credit utilization ratio, which in turn boosts your score. If your credit is in the Poor to Fair range, a boostline will most likely help you improve your score enough to qualify for additional credit products.
The way credit scores are calculated is complex. A boostline that seems promising in one aspect could be damaging in others, so always take the time to consider the big picture so you choose a boostline that will offer the most significant impact.
When used strategically, boostlines can be a highly effective way to build credit and progress toward your long-term financial goals. If you’re interested to learn how a boostline might work for you, contact one of our credit analysts to discuss your options.