Credit Reports to Show Your Credit Card Payment History

In a recent change to your credit report, the
three major credit reporting agencies, Equifax, Experian and
Trans Union, have amended their reporting to include information
regarding your
credit card payment history.  This change will affect more
than 150 million credit card paying consumers.  In addition to
reporting whether you make timely payments each month, the
information reported will detail whether you accumulate interest
and finance charges each month, giving current or potential
creditors a better picture of whether you may be a credit
risk.    

The bureaus desire to include what it considers to be valuable
information will give creditors a clearer picture of your payment
tendencies.  Previously, your credit report only showed your
card balance, credit limit and whether you made timely
payments…..even if it was only the minimum payment, allowing your
debt to credit ratio to grow every month.  The bureaus plan to
now include a two year payment history on their reports detailing
the exact amounts you pay each month.  The data will show the
type of credit card payer you are: a consumer who makes purchases
and then pays off entire balances, or a consumer who carries
balances and pays hefty interest and finance
charges.  
  
Of the three major credit reporting agencies, Equifax will add the
payment history sometime in August, Experian has been slowly
reporting the detailed account information over the past year and
Trans Union began including the information in January of
2013.  The credit bureaus feel that this information is
necessary to their reporting to give credit card issuers a clearer
picture of who they are offering and extending credit
to.    

The negative
effect of reporting this information on consumer reports is the
likelihood of error.  Reporting detailed monthly payment
history provides a greater opportunity for error and like the other
information on your report, the information is also subject to the
Fair Credit Reporting Act (“FCRA”).  The bureaus have decided
for now that the information won’t affect your score.  In
other words, making the minimum payment on your credit card won’t
change how the account is factored into your
score any more than if you made a larger payment or even paid
off the balance in full.  After a period of time however this
may change as the purpose
of a credit score is to determine what type of consumer you are
and how likely it is that you will repay your
debt.      

If you have any questions or concerns relating to your credit
report, contact SmithMarco P.C. for a free case
review.