Recently, I had an interesting back-and-forth conversation with someone who is frustrated over the fact that a mortgage he paid off is not appearing on his credit reports.
His mortgage was originated through a bank’s Trust/Private Banking Department, which does not report information to credit bureaus for privacy reasons. While the situation is unique, his question is one that I've received numerous times over the years:
How do I add a credit reference to my credit report if the lender does not report?
The answer is that typically you cannot.
The three major credit reporting agencies don't accept credit references from companies that are not approved to report information to them. Companies must be screened and sign contracts with the credit reporting agencies to make sure that they follow the requirements of the Fair Credit Reporting Act. As my colleague John Ulzheimer points out:
You have to have an account with the credit bureaus if you want to report to them. It’s not free and it’s not cheap. By reporting you open yourself up to possible FCRA liability and you have to have someone on your staff who will investigate disputes. Smaller lenders are not equipped to absorb the cost for this.
If the lender from whom you borrowed money is not a subscriber to at least one of the major credit reporting agencies, your loan will not be reported, and there currently is no way to add an individual account.
There is an alternative credit bureau called PRBC which is set up to accept payment information that traditional credit reporting agencies don't. And while I like what PRBC is trying to do, it still doesn't carry the same clout as information compiled by the three major credit reporting agencies. Right now, though, it's your only option.
Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes
budgeting, debt recovery and savings information online. She is also the
co-author of Reduce
Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis.