Reporting to the Credit Bureaus

When it comes to credit reporting, there are two questions that are asked consistently:  Do creditors have to report to the bureaus? And how can I get my rent to report to the credit bureaus?

Looking at the first question – Do creditors have to report to the bureaus? – the answer in a word is…no.  There are no set requirements that force a creditor to report to the three credit bureaus, it is entirely the creditor’s prerogative to report. Depending on the creditor and the history on the account, that can be both a good and a bad thing for the consumer. There is also no set time as to when a creditor must report if they choose to do so. This means that every creditor reports at different times of the month.

While most major creditors, i.e.  Chase, Discover, Citi, Wells Fargo, etc.  do report to the bureaus monthly, there are quite a few small banks and credit unions that do not. Or they may only report to one or two bureaus but not all three. There are several reasons for this, which mostly comes down to bureau conditions and cost. For a creditor to report to the bureaus there are several requirements that must be met. A service contract must be set up with each of the bureaus. Specific software (Metro2, EOscar) must be purchased and downloaded. Both steps also require substantial upfront fees. Each bureau has required minimums that creditor must report every month: Equifax requires a minimum of 500 active accounts each month, Trans Union requires 100, while Experian does not have a specific set amount, it is usually between 200-500 depending on the industry (they set their minimums on a case-by-case basis). Because of these conditions, some smaller banks and credit unions may not meet the requirements to be able to report. Or because of financial restrictions, may choose to report only to one or two bureaus or not to report at all.

A good rule of thumb for those who are looking to build or improve credit is when an account is opened with any creditor, make sure to ask what bureaus they report to.

As to the second question – How can I get my rent to report to the credit bureaus? – the answer is that there are ways to have rent payments reporting on the credit report. But it is important to know that it will typically not be factored into the credit scores. There are several companies an individual can go to that will report their rental payments:

All of these have varying monthly fees, and each has some different requirements for reporting.

There are also companies that a landlord can sign up for to report rent liability. These must be signed up for by the landlord or property management company:

These too also require monthly fees to be paid for by the landlord or property management company.

There are some instances of rent being factored into scores, with Experian Boost, rent will be factored into the scores depending on the industry. Also, the newer versions of FICO will normally factor rent into the scores as will personal scores. However, most creditors do not use the newer FICO versions. Fannie Mae and Freddie Mac only accept older versions of the FICO scoring models and those models do not factor in rent no matter who the reporting is coming from.

If a borrower wants their rent to show on the credit report, there are ways to do that.  It just, in most cases, will only suffice to show the history but will not have any impact on the credit scores or help generate scores for borrowers with “thin” credit files.

Bottom line, if a borrower has something they feel should be reporting on their credit report and is not they need to contact the creditor and see if there is any way they might start reporting. It never hurts to ask.  If a borrower wants their rental payments to report so a lender can see their history, there are viable ways to do that, just know that it will most likely not affect the credit scores.