What do Creditors Have to Report to Credit Bureaus?

Creditors and lenders are not required by law to report anything to credit bureaus. However, many businesses choose to report on-time payments, late payments, purchases, loan terms, credit limits, and balances owed. Credit bureaus collect this data, and it helps create a person's credit report, and often this information can impact credit scores.

Businesses usually also report significant events such as account closures or charge-offs. For example, if a mortgage is paid off, this information is reported.

Governmental organizations that maintain public records don't report to the credit bureaus, but the bureaus usually obtain the documents on their own. For this reason, bankruptcy filings also typically show up on credit reports. 

Another example, if a person owes the IRS money, chances are, a public record of a tax lien may find its way onto their credit report, and that can impact your credit score.

Key Takeways

  • Credit Bureaus receive information from lenders and creditors, businesses, and government agencies.
  • The three largest credit bureaus are Experian, TransUnion, and Equifax.
  • Credit reports and credit scores are indicators of how a person handles their debt and credit. 
  • Disputes can be filed against misinformation found on credit reports. 

Creditors and Credit Bureaus

Creditors and lenders such as banks and credit card companies must pay to report information to any of the three major credit-reporting bureaus, which are Experian, Equifax, and TransUnion. Because cost is involved, some creditors and lenders may choose to use only one service instead of all three.

By only alerting one credit bureau, this action can adversely affect even a responsible borrower's credit score. Why? Because not all bureaus receive the same positive information about the consumer's payment history.

For example, when an individual pays off a long-term debt such as a mortgage, this information must reach credit bureaus in order for the debt to be removed from a person's credit history and report.

It may take legwork to get a mistake erased from a credit report, but it is always a good idea.

When do creditors report to the credit agencies? It depends. Some creditors report to the bureaus on a monthly basis, although different businesses file on different days, which means that an individual's credit report is continually updated. Some lenders and creditors submit information on a quarterly basis, too.

Negative Hits on Credit Reports

Negative information, such as late or missed payments, remains on an individual's report for seven years, after which the credit bureaus automatically remove the data.

Debtors who find inaccurate information on their credit reports can file a dispute with the credit bureau or with the creditor who provided the incorrect data. Most claims must be investigated within 30 days, and if the claim is substantiated, all three bureaus must remove the negative report.

The Bottom Line

Credit bureaus are the receptacles of credit information from creditors and lenders, both good and bad, that can help or hurt a person's financial future. Debtors may want to pay close attention to their reports to find out what is being shared with the credit bureaus.

Article Sources
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  2. Federal Deposit Insurance Corporation. "Consumer Protection Topics - Credit Reports."

  3. Experian. "What Happens When You Pay Off Your Mortgage?"

  4. Consumer Financial Protection Bureau. "Removal of public records has little effect on consumers’ credit scores."

  5. United States Bankruptcy Court. "Bankruptcy & Your Credit Report."

  6. Consumer Financial Protection Bureau. "How do I dispute an error on my credit report?"

  7. Experian. "How Often Is a Credit Report Updated?"

  8. USA.gov. "Credit Reports and Scores."

  9. Federal Trade Commission. "Disputing Errors on Credit Reports."