subject: Credit Reporting Bureaus - What You Need To Know [print this page] Your payment history is a record you've established with the three credit reporting bureaus by either paying or not paying your bills on time. This history is recorded by all of your creditors on your three credit reports. The credit reporting agencies, Equifax, TransUnion and Experian keep this information on file for you, your creditors and any new lenders.
Your credit reports will reflect your payment history on all of your credit accounts you've had for the past 7 to 10 years. This includes will include your student loans, mortgages, retail store credit cards, and auto loans among others. Typically, utility providers such as gas, cable and electric companies do not report payments to the bureaus.
How do the Credit Bureaus know if I pay my bills on time or not?
The credit bureaus do not know if and how you initially pay your creditors. It's your creditors that know whether or not you are paying them on time, and they report your payment history to the credit bureaus; whether it's a good or bad report, they run and tell.
This process is called "lender reporting" where your creditors will send all three credit reporting bureaus the current status of your accounts utilizing an electronic tape. Once the credit reporting agencies receive this tape, it's loaded into their system and then unloads into their databases, hence, creating an updated record of all your accounts and payment history month after month.
Ratings: Your Current Status
All your accounts should be paid on time; however, many of us fall behind and believe me, all of this is reported. The finest status you can have on any account is "Paid as Agreed." This means that the creditor is reporting your account as being paid according to the terms of agreement you signed.
If your account is past due then your current status rating will change and this will make your points drop. The current status is commonly displayed as a numeric value that ranges from 1 to 9. If your account is being paid as agreed then the rating will be a "1." Basically any rating other than a "1" is bad. This means you've been late paying your creditor and when you apply for more credit, the potential creditors will see this red flag.
This identifies how the payment reporting systems works and just how your payments are reflected on your credit report. The creditors systems are automated to update your payment history in their computers, which they send to the credit reporting bureaus each month to update your record. Before falling behind in payments, you can always call the creditor and try to get a better payment arrangement. This will not get reported and the payment history will remain positive.
by: David Kamau
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