Credit card companies generally report monthly to all three major credit agencies. In the case where a credit card account hasn’t been used, banks and card issuers may only update the bureaus every few months.
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The three major credit card reporting agencies include Experian, Equifax, and TransUnion. A fourth agency, ChexSystems, tracks consumer checking accounts and verifies account holders’ credit worthiness.
Each credit bureau is obligated to update their records as soon as information is received from a credit card company. That would unfortunately include bad or negative credit information as well as good or positive reports.
Traditionally there is a 60-day lag on a typical credit bureau report. For instance, when a credit report is ordered in August, it might show the status of the consumer’s accounts as of the previous June 30.
Some credit bureau reports might even show an account’s status as of several months earlier, depending on which credit card company is responsible for reporting the information to the bureau, and how active the particular account has been in the recent past.
What if my credit card payment is just a few days late?
While most credit card companies won’t report you to the bureaus if you’re just a few days late, some will. Whether they report you or not depends on a number of factors, the most important being the company’s own policies.
A credit card company will also consider your payment history before making a decision to report a late credit card payment. If you have a history of slow payments, the company is much more likely to report payments that may only be a few days late.
On the other hand, for consumers with perfect or nearly perfect on-time payment records, the credit card issuer will usually not report payments that are a few days behind and might even be willing to overlook a payment that was made 30 or more days past the due date.
Credit card companies have also, on occasion, been known to reverse a legitimate late payment record or reimburse a late charge or other fees, at the request of a credit cardholder who has been a dependable long-term client of their company.
What information does the credit card company report to the bureaus?
Typically, credit card companies report a cardholder’s payment history, the current outstanding balance on the credit card account and the credit line or credit limit assigned to the card. In some cases however, credit card issuers do not report the borrower’s credit limit and will instead report the highest balance reached on the credit card account.
How does not reporting my credit limit affect me?
Not reporting your credit card limit could have a negative impact on your FICO credit score. One of the variables that FICO bases its ratings on is the utilization ratio, the amount of your line that is in use at any particular time in comparison to the total credit limit.
If you are always at your limit, your ratio will be higher and your FICO credit point score substantially lower. If your credit card company only reports the highest balance you have reached and your balance stays at that level, it will also lead to a higher FICO score.
Credit card issuers that typically report only a high balance include American Express, whose regular green card has no credit limit, and other cards, which feature a no preset spending limit policy.
According to Forbes Magazine, consumers should keep their credit card balances at 30% or less of their total credit limits to ensure a strong FICO credit score. Forbes goes on to say that consumers should realize that credit limits could be reduced as well as increased. Just because credit card companies increase your limit, doesn’t mean you should run up the balance.
Are many people behind on their credit card payments?
No, certainly not as many as there were a year or two ago. According to the TransUnion credit reporting agency, late payments reached a 17 year low in August of 2011. Those consumers who were 90 days or more past due on their credit card accounts fell to .60% down from .92% one year ago.
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