What's Missing on Your Credit Report Could Hurt You

When it comes to credit scores, we’re often too critical, focusing on the negatives rather than the positive. But it’s positive information — such as accounts paid on time and credit cards with low balances — that can really boost your credit scores.

So what happens when your good credit references aren’t showing up on your credit reports? A consumer who goes by the screen name Vishu Pulle recently posted this question:

I have a secured card from 08/25/2012, but I can’t generate or add a credit report. Prior to this I had no credit history.

Another reader, David, posted this question: “Can you force a bank to report to the credit reporting agencies?”

I have a credit score of a 640 with Equifax but not scoreable on Transunion and Experian. My bank only reports to one to credit agency. I’ve been trying to get a home loan, what can I do?

Vishu and David are both right to be concerned about the fact that their single account is not appearing on all of their credit reports. While it’s hard to have high credit scores with only one account, you have to start somewhere!

There are several ways that good credit references, such as secured cards and bank loans paid on time, can help your credit:

Accentuate the Positive

Everyone knows a positive payment history helps your credit scores. But there’s more to it than that, notes Barry Paperno, Credit.com’s community director and a credit scoring expert — “One of the things the score looks at is the proportion of positive to negative items.” That means that even if your credit report lists negative information, such as late payments or bankruptcy, for example, having accounts that are paid on time can help to “offset” information. “People know that the more negative information, the worse it is for your scores, but conversely the more positive information, the better,” he notes.

Length of Credit History

The score will look at the average age of all your accounts, as well as the age of the oldest and newest accounts. “Older accounts can help — even a paid off mortgage,” Paperno explains.

Credit Mix

The credit score considers the mix of different types of accounts on your credit scores, and ideally you want to have both installment and revolving accounts listed.

Why Is the Good Stuff Missing?

So what are some of the reasons why good credit references may not appear on your credit reports?

Lenders Don’t Report

This is probably the most common reason why references aren’t on your reports. Not all lenders report their customer’s payment histories to the credit reporting agencies. Some report only negative information. And others, as in the case of David’s bank, only report to one or two CRAs. There’s nothing you can do to force a lender to report accounts that it normally doesn’t report, because the credit reporting system is voluntary. And credit reporting agencies (CRAs) generally don’t allow you to add individual credit references because they have to make sure any companies that report (called “furnishers” in federal law) follow the Fair Credit Reporting Act. It’s simply too expensive and time consuming to work with furnishers on a case-by-case basis.

If you are trying to build or rebuild your credit, it’s especially important to make sure that your payment history on any loans or secured cards you get will be reported to all three credit reporting agencies. Otherwise, those references really don’t count.

In Vishu’s case, it may simply be too soon to expect this account to be reported. When he wrote to us, his account was not yet 60 days old, and it sometimes take 45 – 60 days or longer for new accounts to show up. He should contact the lender and ask them what their credit reporting policy is. If they say they do report positive information on a regular basis to all three bureaus, then he should double check that the personal information they have on file for him is correct. If the account doesn’t show up within another 30 days or so, he should contact them again and ask them to re-report his account.

And in David’s case, he is going to have to either build credit by obtaining a secured card or another account that reports to all three agencies. He can also check out eCredable, which may be able to help him build credit using other types of payments he already makes.

Social Security Number Mix-Ups

If your information is confused with someone else’s it may end up reported with that other person’s credit report instead of yours. The Social Security number is not the only item used to “match” information with the correct credit file, but it is important. If you are missing crucial positive information, one of the first things you can do is to ask your spouse to check his or her credit reports to see if the account appears there, advises Paperno. “It’s possible the lender ‘flipped’ the Social Security numbers when it first reported the account,” he explains.

Invisible Accounts

If you disputed an account previously and the credit reporting agency could not verify it, the CRA may have “suppressed” that tradeline so it would not be included in your credit reports. The information is still available to the CRA, but it’s essentially invisible because it is not included in your reports.

These types of disputes are hard to pursue because you don’t necessarily know when information is suppressed or missing altogether. One option is to use this sample letter to request your “full file” disclosure. Another option, if you’ve already received your credit report through another source such as AnnualCreditReport.com or a credit monitoring service, is to file a dispute asking the credit reporting agency to include the “missing” account if that information is available. If you go that route, include the full account number in your dispute. Paperno says that makes it easier for the CRA to find the account. You can also file a dispute with the lender that should be reporting the account.

Closed Accounts That Disappear

Old accounts are normally reported for quite a while after they are paid off, but that’s not always the case. The lender may stop reporting them, for example, or the credit reporting agency may drop them from your credit file if they become quite old and you have a lot of other newer accounts. Again, it’s hard to get these kinds of accounts added back to your reports since there are no requirements that they be included. However, you may try reaching out to the lender and/or filing a dispute with the credit reporting agencies.

Finally, if your goal is to build or rebuild credit, be sure to review your credit reports at least once a year, and monitor your credit scores monthly with Credit.com’s free Credit Report Card. You’ll be able to keep track of how your on-time payments help your credit scores, and focus on the positive instead of the negative.

Image: amboo who?, via Flickr