I've seen posts in the board about 'tradelines' and innuendo suggesting these are bad to have on your credit report. Can anyone clarify what they are, and why they are 'bad' on one's credit report? Thanks, -Nevo
It is what is on your credit report...credit cards, mortgage, student loan, personal loan from your bank, etc. The bad part is if you have a "FINANCE COMPANY" some think that is bad.
Thanks. Okay, I guess I should expound upon my question. I'm in the market for new living room furniture. A local shop is offering 18 months no payments no interest. I do, of course, plan to make installment payments to pay the balance down to zero before the 18 month period ends. I assume this is with a finance company. (I have no idea who their lender is.) Would such a scenario be a negative on a credit report? -Nevo
YOU ASSUME??? Find out what the creditor is (may be the store name)...a perfectly paid "FINANCE COMPANY" is still better than a late payment, or BK, or collection!!! 18 months is very long for no payments or interest!!! WARNING******YOU MAY GET BACK DATED INTEREST TO THE PURCHASE DATE IF YOU DON'T PAY IN FULL BY THE EIGHTEENTH MONTH!!!
I'm sure he can read the agreement fully. 1. An installment is not bad, as long as you pay it on time, every month as in the agreement. 2. An installment is BAD in that it is shown on your credit report as a debt payable each month, and the payment per month amount will count against your overall salary per month, when it comes to getting credit elsewhere , while you are still paying it off. However, once its paid off completely, and on time, with no lates, it becomes a VERY good thing. Overall, its a good thing to have on your report. However if all your credit cards are maxxed out, you take out this loan, and its causing your debt to income ratio to be high, and you want to buy a house, it would be an unwise idea to do so. Because other lenders know you have this loan and how much you must pay each month, etc
I bought furniture on a similar plan and their was no interest for over a year (the interest did not accrue either which is important). Mine ended up being with a finance company but I know for some stores banks such as MBNA do the financing. I feel like if you pay on time and it is within your budget it could not possibly be a negative thing. Too many finance companies are not good but it is still better than no credit and can be a good way to get a positive tradeline on your report (and some nice furniture !)
