What Are Trades on Your Credit Report?
Each entry in your credit report is known as a trade. These entries will appear on your file within trade lines that contain additional information about the account. This helps you--and any lenders that may view your credit report--to identify the debt and how it reflects on your financial behavior.
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The Facts
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All trades that appear within your credit file are regulated by the Fair Credit Reporting Act (FCRA) of 1971. The FCRA stipulates which information must appear in a trade line and how long the trade line may legally appear within your credit file.
Types
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Revolving trades are debts on which the debt amount and payment amount are subject to change. A common example of a revolving trade is a credit card debt. Installment trades are financial transactions, such as loans, in which a set amount is borrowed and the borrower makes payments until the debt is paid in full.
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Significance
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The trades that are reflected on your credit report will play a large role in determining your credit score. Positive trades that are paid on time will improve your score while derogatory trades, debts you have left unpaid, decrease it.
Time Frame
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Revolving and installment trades that have a positive status will appear on your credit report for 10 years from the date the account was closed. Trades with a negative status will appear on your credit report for 7 ½ years from the date you made the last payment on the account.
Considerations
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The FCRA gives you the right to dispute any trades on your credit report that reflect incomplete or inaccurate information.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of Casey Serin
