How to Manage Multiple Credit Cards and Protect Your Credit Score

Managing multiple credit cards can actually help your credit score—if you do it right. The key is staying organized, paying on time, and keeping balances low. Here’s how you can handle several cards without hurting (and potentially even helping) your credit:

1. Always Pay on Time

• Set up automatic payments or payment reminders for each card to ensure you never miss a due date. A late payment can have a major negative impact on your credit score and result in costly late fees.

• Align due dates: If possible, request the same payment due date for all cards. This simplifies your monthly financial routine and reduces the chance of a missed payment.

2. Watch Your Credit Utilization

• Keep balances well below your limits. Credit utilization—the percentage of your credit limit you use—is a major factor in your score. Stay under 30% per card and overall if you can.

• Splitting purchases across multiple cards may help maintain lower balances on each, improving your utilization ratio.

3. Stay Organized

• Use a spreadsheets, budgeting apps, or even a notebook to track each card’s spending, due date, and rewards categories.

• Assign a purpose to each card: For example, use one for groceries and another for gas or travel. This strategy makes it easier to monitor spending and maximize rewards while staying in control.

4. Don’t Over-Apply

• Opening several credit cards in a short time creates multiple hard inquiries, which can temporarily lower your score and make you look riskier to lenders.

• Space out applications (about six months apart is a common suggestion) to minimize any dips in your score.

5. Keep Old Cards Open

• Don’t close your oldest cards unless absolutely necessary. A longer credit history boosts your score, and closing cards may decrease your available credit, raising your utilization.

• Use older cards occasionally so they stay active.

6. Monitor for Fraud and Errors

• With more accounts, there’s a higher risk of fraud or mistakes. Review your statements monthly, enable alerts for unusual activity, and regularly check your credit reports.

7. Spend Responsibly

• Having more cards is not a license to spend more. Stick to your budget and avoid carrying balances from month to month; pay in full whenever possible to avoid interest.

8. Leverage Rewards—Wisely

• Using specific cards for different categories can maximize rewards, but always keep your balance in check—chasing rewards is not worth debt or missed payments.

Bottom Line:
Multiple credit cards won’t damage your credit score if you use them thoughtfully. In fact, when managed well, they can improve your score by raising your available credit and boosting your credit history. The real risks come from missed payments, high balances, and loss of control. Stay organized, pay in full when you can, and use your cards strategically for the best results.

If managing multiple cards ever feels overwhelming, consider scaling back or consolidating your accounts to keep your finances (and your peace of mind) in top shapeop shape.

When Do Credit Card Companies Report to Bureaus? Timing Matters for Your Credit Score

Credit card companies play a crucial role in shaping your credit profile by regularly reporting your account activity to the major credit bureaus—Experian, Equifax, and TransUnion. However, many consumers are unclear about exactly when this reporting happens and how it can impact their credit scores. Here’s what you need to know.

When Do Credit Card Companies Report?

• Frequency: Most credit card companies report your account information to the credit bureaus once a month. However, there is no universal day or date—reporting schedules vary by issuer and even by individual card.

• Typical Timing: The most common time for reporting is at the end of your billing cycle, also known as your statement closing date. This is the day your monthly statement is generated, not necessarily your payment due date.

• Variations: Some issuers may report in the middle or at the end of the month, and the reporting may not be on the exact same day each month. In some cases, companies might batch data and report all customer accounts at once, which could add days or weeks between your statement closing and reporting to the bureaus.

• Different Bureaus, Different Dates: Credit card companies don’t always send updates to all three bureaus simultaneously, so updates can appear on each report at slightly different times.

What Information Is Reported?

Credit card companies typically report:

• Your account balance as of the statement closing date

• Credit limit

• Payment history (including any missed or late payments)

• Account status (open, closed, delinquent, etc.)

Why Does the Reporting Date Matter?

• The balance reported is usually the one from your statement closing date, not after your payment due date. This means if you pay your balance in full after the statement is produced, a higher balance may still be reported.

• Since credit utilization (your balance vs. your credit limit) is a major credit score factor, understanding your card’s reporting schedule can help you optimize your reported balance for a better credit score. Many people choose to pay down their balance before the statement closing date to minimize reported utilization.

How Can You Find Your Reporting Date?

• Look for the statement closing date on your monthly statement, which is often a consistent date each month.

• Some credit card companies will tell you the reporting date directly if you call customer service or check your online account features.

• Credit monitoring tools or services may display when your information was last reported to each bureau.

Special Notes

• Late Payments: Negative marks, such as late payments, are generally only reported if payment is at least 30 days overdue.

• Not All Issuers Report Everywhere: Some smaller issuers may not report to all three bureaus, so always check with your specific lender if you’re unsure.

By understanding when and how your credit card activity is reported to the bureaus, you can better manage your balances and maximize your credit score potential. Make it a habit to monitor your statement closing dates and plan payments accordingly for the healthiest credit profile

Court Blocks Ban on Medical Debt in Credit Reports: What It Means for Consumers in 2025

A sweeping new federal rule was introduced in early 2025 to remove medical debt from credit reports, aiming to boost millions of Americans’ credit scores and reduce the negative influence of medical bills on borrowing. However, in July 2025, a court ruled against this regulation, meaning medical debt can once again be included on credit reports.

What Was the New Rule?

• The Consumer Financial Protection Bureau (CFPB) finalized a rule in January 2025 to entirely ban the inclusion of medical debts on credit reports and prohibit lenders from using medical information in credit decisions.

• The CFPB found that medical debt is often not a fair indicator of creditworthiness—debts frequently arise from emergencies or billing errors and do not accurately predict whether a person will repay a loan.

Key Features of the Proposed Rule:

• Unpaid medical debt (around $49 billion for 15 million Americans) would no longer impact credit scores.

• The average person affected would see a credit score increase of about 20 points.

• The CFPB expected this change could result in 22,000 more mortgage approvals each year.

• Lenders would be barred from considering medical debt or even most forms of medical information, except in very limited and specific circumstances (for example, verifying income paid as Social Security disability or similar).

What Caused the Reversal?

• In July 2025, a federal judge vacated (overturned) the CFPB rule, siding with industry groups who challenged the bureau’s authority to make this sweeping change.

• As of the ruling, medical debt can remain on credit reports, as long as it is properly coded to conceal sensitive details.

• The court decision means the temporary protections the rule would have provided are not currently in effect.

The Current State of Medical Debt on Credit Reports

• Credit bureaus (Equifax, Experian, TransUnion) had previously limited the reporting of medical debt by removing:

  • Paid medical debts

  • Unpaid medical debts less than a year old

  • Medical debts under $500

• With the court overturning the CFPB’s rule, any other medical debt may be reported and used for credit evaluations.

What Does This Mean for Consumers?

• Medical debt can continue to negatively affect credit scores and—by extension—mortgage, auto, and other lending approvals.

• Consumers should still dispute any inaccurate medical debts and watch for changes as appeals or new policies may be introduced in the future.

Key Takeaways

• There was briefly a historic rule to erase all medical debt from credit reports.

• The rule was intended to make lending fairer for those with unavoidable or erroneous medical bills.

• A court has now blocked this rule, meaning medical debt can again be reported and considered by lenders as before.

Consumers must remain vigilant, as the legal and regulatory landscape around medical debt and credit reporting remains in flux. Always check for the latest updates and review your credit report for errors or unfair reporting.

Who Can Access Your Credit Report?

Your credit report contains detailed information about your financial history, including your borrowing habits, payment history, and outstanding debts. Because this information is highly sensitive, access to your credit report is strictly regulated by federal law—primarily the Fair Credit Reporting Act (FCRA). Here’s what you need to know about who can view your credit report and under what circumstances.

Who Can Access Your Credit Report?

Only certain entities with a permissible purpose under the FCRA can legally view your credit report. These include:

• Lenders and Creditors: When you apply for a loan, credit card, mortgage, or other forms of credit, lenders check your credit report to determine your creditworthiness and set terms like interest rates.

• Landlords and Rental Companies: Landlords may review your credit report to assess whether you’re likely to pay rent on time before approving your rental application.

• Insurance Companies: Insurers sometimes use your credit information to help determine your eligibility for coverage and calculate your premiums.

• Employers and Prospective Employers: Some employers, especially in roles involving financial responsibility, may request your credit report as part of a background check. However, they must obtain your written consent before accessing your report.

• Government Agencies: Certain government bodies may access your credit report to determine your eligibility for government benefits, licenses, or for law enforcement and child support enforcement purposes.

• Debt Collection Agencies: If you owe money, debt collectors can check your credit report to locate you or assess your ability to pay.

• Utility and Phone Companies: These companies may review your credit report when you apply for new service accounts.

• Existing Creditors: Companies you already have credit with may periodically review your report to manage your account or offer you additional credit.

Special Cases

• Court Orders and Subpoenas: Your credit report can be released in response to a court order, grand jury subpoena, or for certain child support enforcement actions.

• Prescreening for Offers: Lenders and insurers may access certain information in your credit file to make you pre-approved offers of credit or insurance (a process called prescreening). You can opt out of these prescreened offers.

• Your Own Request: You have the right to request and view your own credit report at any time.

Who Cannot Access Your Credit Report?

Not just anyone can see your credit report. Friends, family, or random individuals cannot access your credit report unless you provide explicit written permission or a copy yourself. Any entity or person who tries to obtain your credit report without a valid, legal reason may face civil and criminal penalties.

How Is Access Tracked?

Every time your credit report is accessed, the credit bureau records who accessed it and when. This information is listed in the “inquiries” section of your report, so you can see a history of who has viewed your credit information.

Protecting Your Credit Privacy

• Review your credit report regularly for unauthorized access or errors.

• Dispute inaccuracies with the credit bureau if you spot any.

• Consider a security freeze or fraud alert if you’re concerned about identity theft.

Understanding who can view your credit report empowers you to protect your financial privacy and make informed decisions about your personal information

The Return of Student Debt: A Looming Credit Crisis for Americans

The Return of Student Debt: A Looming Credit Crisis for Americans

As the calendar turns to October 2024, millions of Americans are facing a harsh financial reality. The long-awaited resumption of student loan payments has arrived, and with it comes a potential credit crisis that could impact borrowers for years to come.

The End of the Pandemic Pause

For over three years, federal student loan borrowers enjoyed a reprieve from their monthly payments, thanks to the pandemic-era pause. This break allowed many to redirect funds towards essential needs and even build up savings. However, as of October 1st, that grace period has come to an end.

A Shocking Return to Reality

The numbers are staggering. Approximately 28 million borrowers are now required to resume payments on their federal student loans. For many, this sudden financial obligation is proving to be overwhelming.

The Delinquency Dilemma

Perhaps most concerning is the rapid rise in delinquencies. Within just the first month of repayment, a significant portion of borrowers have already fallen behind. This surge in missed payments is not only straining personal finances but also threatening the credit scores of millions.

Credit Scores Under Siege

The impact on credit scores cannot be overstated. As delinquencies mount, many Americans are seeing their hard-earned credit ratings take a hit. This decline in creditworthiness could have far-reaching consequences, affecting everything from future loan approvals to employment opportunities.

A Call for Solutions

While the situation appears dire, it's crucial for borrowers to explore their options. Income-driven repayment plans, deferment, and forbearance may offer some relief. Additionally, communication with loan servicers is key to navigating this challenging landscape.As we move forward, it's clear that the student debt crisis requires ongoing attention and innovative solutions. The coming months will be critical in determining how millions of Americans weather this financial storm and what long-term impact it will have on the nation's economic health.

Common Credit Report Errors You Need to Know About

Common Credit Report Errors You Need to Know About

Your credit report plays a crucial role in your financial life, influencing everything from loan approvals to interest rates. However, errors in these reports are more common than you might think. To protect your financial health, it's essential to regularly review your credit report and know what to look for. Let's dive into the most common credit report errors and how to spot them.

Identity Errors
One of the first things to check is the accuracy of your personal information. Look for:

• Misspellings in your name, incorrect phone numbers, or wrong addresses

• Accounts that don't belong to you but are listed under your name

• Suspicious accounts that could indicate identity theft

These errors might seem minor, but they can have significant consequences. For instance, a "mixed file" occurs when your information gets confused with someone else's, potentially affecting your credit score.

Account Status Inaccuracies
Next, scrutinize how your accounts are reported:

• Closed accounts incorrectly shown as open

• Accounts where you're listed as the owner instead of an authorized user

• Inaccurate reporting of late or delinquent payments

• Wrong dates for last payments, account openings, or first delinquencies

• Duplicate listings of the same debt, possibly under different names

These errors can significantly impact your credit score and financial opportunities.

Data Management Errors
Finally, check the numerical details:

• Incorrect current balances on accounts

• Inaccurate credit limits

Even small discrepancies in these figures can affect your credit utilization ratio, a key factor in determining your credit score.

What to Do If You Find Errors

If you spot any of these errors, don't panic. You have the right to dispute inaccurate information. Here's what to do:

1. Contact the credit reporting company that provided the report

2. Reach out to the lender or company that furnished the incorrect information

3. Follow the dispute instructions provided in your credit report

Remember, maintaining an accurate credit report is crucial for your financial wellbeing. By regularly checking your report and promptly addressing any errors, you can ensure that your credit score truly reflects your financial responsibility.Stay vigilant, and don't hesitate to take action if something doesn't look right. Your financial future may depend on it!

Check your credit report for free at Annual Credit Report

Credit Report Errors on the Rise: Why You Need Regular Credit Checkups

In an era where financial health is more crucial than ever, a disturbing trend has emerged: credit report errors are skyrocketing. Recent data from Consumer Reports shows that complaints about credit report inaccuracies filed with the Consumer Financial Protection Bureau (CFPB) have more than doubled since 2021, with nearly 645,000 complaints lodged last year alone.These errors are far from trivial. They can significantly impact your financial well-being, affecting your eligibility for housing, job opportunities, and access to credit. With so much at stake, it's clear that we need to take a more proactive approach to managing our credit reports.

The Credit Checkup Initiative

In response to this alarming trend, Consumer Reports and WorkMoney have launched the "Credit Checkup" project. This initiative aims to encourage consumers to regularly review their credit reports, identify inaccuracies, and report errors promptly to the CFPB. Why it matters: Your credit report is essentially your financial report card. It plays a pivotal role in shaping your financial future, influencing loan approvals, interest rates, job prospects, and housing options.

How to Conduct Your Credit Checkup

1. Access your free reports: Thanks to a policy implemented during the COVID-19 pandemic, the three major credit reporting agencies - Equifax, Experian, and TransUnion - allow consumers to access their reports weekly at no cost through AnnualCreditReport.com.

2. Scrutinize for errors: Common mistakes include incorrect personal details like names or addresses, and misreporting of debts related to loans.

3. Report inaccuracies: If you find errors, dispute them with each major credit bureau. Provide supporting documentation and a detailed explanation of the issue.

4. Keep records: Maintain copies of all correspondence and consider sending materials via certified mail.

5. Escalate if necessary: If disputes remain unresolved, escalate the issue to the CFPB. In some cases, legal assistance may be required.

Contact us if your disputes don’t get resolved

What Do Lenders Really See When They Check Your Credit Report?

What Do Lenders Really See When They Check Your Credit Report?

Have you ever wondered what lenders actually see when they pull your credit report? It's not just a mysterious number that determines your fate. Let's explore the key elements that lenders examine when reviewing your credit history.

Your Personal Profile

First things first, lenders will see your basic personal information:

- Full name

- Current and previous addresses

- Social Security number

- Date of birth

This information helps verify your identity and ensures they're looking at the right person's credit history.

The Credit Account Lowdown

Next comes the meat of your credit report – your credit accounts. Lenders will see:

- Types of accounts (credit cards, mortgages, auto loans, etc.)

- When each account was opened

- Credit limits and loan amounts

- Current balances

- Payment history (including on-time payments and any late payments)

This section gives lenders a comprehensive view of how you've managed credit in the past. They'll be looking for a history of on-time payments and responsible credit use.

Public Records and Collections

Any public records related to your finances will show up here. This includes:

- Bankruptcies

- Tax liens

- Judgments

- Collection accounts

These items can significantly impact your creditworthiness, so lenders pay close attention to this section.

Credit Inquiries

Lenders can see who else has been checking your credit. There are two types of inquiries:

1. Soft inquiries (when you check your own credit)

2. Hard inquiries (when you apply for credit)

Too many hard inquiries in a short period can be a red flag for lenders, suggesting you might be taking on too much new credit.

Credit Scores

While not technically part of your credit report, lenders often receive credit scores along with the report. These scores, like FICO or VantageScore, provide a quick snapshot of your creditworthiness.

The Big Picture

Lenders aren't just looking at individual elements; they're piecing together an overall picture of your credit health. They'll consider:

- Length of credit history

- Credit utilization (how much of your available credit you're using)

- Mix of credit types

- Recent credit activity

What This Means for You

Understanding what lenders see can help you manage your credit more effectively. Here are some key takeaways:

1. Regularly check your credit reports for accuracy

2. Make payments on time, every time

3. Keep credit card balances low

4. Be cautious about applying for new credit

5. Maintain a mix of credit types if possible

Remember, your credit report tells your financial story. By managing your credit responsibly, you're writing a story that lenders will want to read – and one that could open doors to better financial opportunities in the future.

Experian RentBureau: Helping Renters Build Credit Through On-Time Payments

Experian RentBureau: Helping Renters Build Credit Through On-Time Payments

Renting a home is a significant financial responsibility for many people, but did you know that your rent payments don't automatically help build your credit score? That's where Experian RentBureau comes in. Experian RentBureau is the largest and most widely used database of rental payment information, currently including data on over 26 million residents nationwide. This powerful platform allows property management companies and third-party rent reporters to submit rental payment data directly and automatically to RentBureau on a daily or monthly basis. By opting in to have your rental data reported through RentBureau, you can potentially increase your credit score simply by paying your rent on time. This is a game-changer for renters, as your rent is likely one of your biggest monthly bills, but it doesn't normally count towards your credit history.

The Benefits of Reporting Rental Data

When your on-time rent payments are reported to Experian RentBureau, it can help you build credit history and improve your credit score. This is especially valuable for those who may have limited or no credit history, as it provides an additional avenue to demonstrate responsible financial behavior. Additionally, RentBureau's comprehensive database allows property managers to make more informed decisions when screening and approving rental applications. By accessing detailed rental payment histories, they can confidently approve more qualified applicants, faster.

How to Get Started with Experian RentBureau

To take advantage of Experian RentBureau, start by checking with your current or prospective landlord to see if they are already reporting rental data to the platform. If so, you can request a copy of your RentBureau consumer report to review the information they have on file. If your landlord is not yet reporting to RentBureau, you can encourage them to do so or explore options to have your rent payments added to your Experian credit report through services like Experian Boost. Don't let the opportunity to get credit for your responsible rent payments pass you by. Work with Experian RentBureau to ensure your rental history is accurately reflected and contributing to your overall credit profile.

Links:

Request Experian RentBureau Report

Dispute Experian RentBureau Report

What is a Mixed Credit File?

What is a Mixed Credit File

A mixed credit file occurs when your credit information gets combined with someone else's on your credit report, leading to inaccuracies that can negatively affect your credit scores. This can happen due to data entry errors, sharing a name with a family member, having a common surname, similar name spellings, sharing a birthday, or having a Social Security number similar to someone else's.

Consequences of Having a Mixed File

Having a mixed credit file can have several consequences, including poor credit ratings, credit denials, and higher interest rates. When your credit information gets combined with someone else's, it can lead to inaccuracies in your credit history and identifying information. This can result in you being denied for credit, receiving higher interest rates on loans or credit cards, and even being denied for a job or a home rental or mortgage. It can also lead to confusion and difficulty in fixing the errors, as well as potential violations of the Fair Credit Reporting Act.

How to Check If You Have a Mixed File

To check if you have a mixed credit file, you should periodically review your credit report for any unfamiliar information. You can do this by obtaining your credit report from the three major credit bureaus—Equifax, Experian, and TransUnion. You can check your reports for free once a week at: https://www.annualcreditreport.com

Look for any errors or inaccuracies, such as unfamiliar addresses, accounts, or personal information. If you find someone else's information on your credit report, you may have a mixed credit file. In this case, you should submit a dispute with all the credit bureaus that have incorrect information on your credit reports and provide documentation to verify your identity. This may include your full name, date of birth, Social Security number, and current address.

If you find a mixed credit file, you should take the following steps to resolve the issue:

1. Obtain Your Credit Reports: Regularly check your credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—to look for any errors or inaccuracies, such as unfamiliar addresses, accounts, or personal information.

2. File a Dispute with the Credit Reporting Agency: Contact the credit reporting agency that has the mixed file and file a dispute. You can do this online, by mail, or over the phone. Clearly explain the issue and identify the specific items that you believe are incorrect. Provide documentation and evidence to support your claim, including your full name, date of birth, Social Security number, and current address.

3. Provide Supporting Documentation: Ensure that you provide consistent and correct information to all of your creditors and financial institutions, including your full name, Social Security number, date of birth, and current and previous addresses.

4. Follow Up: Follow up with the credit reporting agencies to ensure that the errors are corrected and that your credit reports are accurate.

It's important to address any discrepancies as soon as possible to prevent any adverse impact on your credit and financial opportunities.

Contact us if you are having trouble disputing these errors. We can help!

What Does Your Credit Score Mean?

If you know your credit score but don't know what the number means, there are several resources available to help you understand your credit score and how it impacts your financial health. Here are some steps you can take:

1. Understand what a credit score is: A credit score is a three-digit number that represents your creditworthiness, or the likelihood that you will pay your bills on time. It is calculated based on the information in your credit report.

2. Learn about credit score ranges: Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. Different lenders may have different criteria for what they consider a "good" credit score, but generally, a score above 700 is considered good.

3. Understand how your credit score is calculated: Credit scores are calculated based on several factors, including payment history, amounts owed, length of credit history, new credit, and credit mix.Understanding these factors can help you identify areas where you can improve your credit score.

4. Check your credit report: Your credit report contains the information that is used to calculate your credit score. You can request a free copy of your credit report from https://www.annualcreditreport.com Reviewing your credit report can help you identify errors or inaccuracies that may be impacting your credit score.

5. Take steps to improve your credit score: If your credit score is lower than you would like, there are several steps you can take to improve it. These include paying your bills on time, paying down debt, and avoiding opening too many new credit accounts at once.

Credit Score Range

Credit scores typically range from 300 to 850, and different credit score ranges can indicate different levels of creditworthiness. Here are the most common credit score ranges and what they mean:

1. Poor: A credit score below 580 is generally considered poor and may make it difficult to qualify for credit or loans.

2. Fair: A credit score between 580 and 669 is considered fair and may qualify you for some credit or loans, but at higher interest rates.

3. Good: A credit score between 670 and 739 is considered good and may qualify you for credit or loans at competitive interest rates.

4. Very Good: A credit score between 740 and 799 is considered very good and may qualify you for credit or loans at even more competitive interest rates.

5. Exceptional: A credit score above 800 is considered exceptional and may qualify you for the best interest rates and terms on credit or loans.

It's important to note that different lenders may have different criteria for what they consider a "good" credit score, and credit score ranges can vary based on the scoring model used to evaluate them. However, understanding these credit score ranges can help you gauge your credit health and take steps to improve your credit score over time.

How Often Do Credit Scores Update?

Credit scores typically update at least once a month, but the frequency could vary depending on your lenders and unique financial situation. Lenders usually report updated information every 30-45 days, so it's possible you might receive an updated credit score each month.

However, every lender has its own reporting schedule and policies, so there is no set date each month when you can expect your credit scores to be updated. The information in your credit reports must update first before your credit scores can update.

The frequency of credit score updates depends on how many active credit accounts you have and when each of those lenders reports new information

It's important to note that each credit monitoring service may update at different times, and not all lenders report to all three credit reporting agencies, which is one reason why you may see some variations in your credit scores.

Several factors can affect credit scores, including:

1. Payment history: Payment history is the most significant factor that affects credit scores, accounting for 35% of the total score. It considers whether you have paid your bills on time for each account on your credit report, including credit cards, loans, and other debts.

2. Amounts owed: The total amount you owe on your credit accounts and the percentage of your available credit that you are using also affect your credit score. This factor makes up 30% of your credit score.

3. Length of credit history: The length of time you have had credit accounts is another factor that affects your credit score, accounting for 15% of the total score. The longer your credit history, the better your score.

4. New credit: Opening new credit accounts can also affect your credit score, making up 10% of the total score.

5. Applying for multiple credit accounts in a short period can negatively impact your score.

6. Credit mix: The types of credit accounts you have, such as credit cards, loans, and mortgages, also affect your credit score. This factor makes up 10% of the total score. Having a mix of credit accounts can positively impact your score.

It's important to note that different credit-scoring models may weigh these factors differently, and lenders may also consider other factors when evaluating your creditworthiness. However, understanding these factors can help you manage your credit accounts and improve your credit score over time.

Ultimately, it's a good idea to check your credit reports regularly for accuracy and monitor your credit score to ensure that you are aware of any changes.

You can check your credit report for free once a week at: https://www.annualcreditreport.com

This site provides your full report from Experian, Equifax, and TransUnion.

Basics of Consumer Credit

What is Consumer Credit?

Consumer credit is the borrowing of money for goods and services. This could be in the form of credit cards, personal loans, and other lines of credit. Total consumer credit comprises of two major types: revolving and non-revolving. The borrower agrees to pay back the borrowed amount plus interest over a set period of time, usually in monthly installments. Consumer credit is commonly used for big purchases such as cars, homes, and education.

Revolving credit

Revolving credit lets you borrow up to the pre-approved credit limit. The borrower is required to make monthly payments either on the full amount or regular payments. Interest is charged on the outstanding balance. Examples include credit cards, home equity lines of credit (HELOCs), and personal and business lines of credit.

Non-revolving Credit

Non-revolving credit is a type of credit a borrower repays in fixed payments over a set period. Unlike revolving credit, a non-revolving credit is a one time arrangement. Once the credit line is paid off, the lender closes the account. Examples include: home mortgage loans, student loans and business loans.

What is a Credit Report?

A credit report is a record of an individuals credit activity and current credit situation. The report is created by the credit reporting agencies also known as credit bureaus or credit reporting companies, that collect information about an individual’s credit accounts, payment history, and other financial transactions that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company.

What’s in My Credit Report?

Your credit report will include:

Personal information

• Your name and any name you may have used in the past in connection with a credit account, including nicknames

• Current and former addresses

• Birth date

• Social Security number

• Phone numbers

Credit accounts

• Current and historical credit accounts, including the type of account (mortgage, installment, revolving, etc.)

• The credit limit or amount

• Account balance

• Account payment history

• The date the account was opened and closed

• The name of the creditor

Collection items

Public records

• Liens

• Foreclosures

• Bankruptcies

• Civil suits and judgments

• A credit report may include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.

Inquiries 

Companies that have accessed your credit report.

What are Inquiries?

An inquiry is a record of when a lender, a creditor, or other authorized entity requests to see your credit report. There are two types: hard inquiries and soft inquires.

Hard Inquiry: Occurs when a lender or creditor requests to see and individual’s credit report as part of a credit application for a loan or credit card. Hard inquires can impact a credit score and remain on a credit report for up to 2 years. Multiple hard inquiries within a short period of time can signal to lenders that an individual is seeking a lot of credit, which could be interpreted as a sign of financial distress.

Soft Inquiry: Does not impact credit scores and are not visible to lenders. Soft inquiries can be initiated by the individual when checking their own credit report or by organizations like employers or credit monitoring services.

How Do I Check My Credit Score?

As of April 2023, Annual Credit Report is still allowing access to free credit reports once a week. Go to this link: https://www.annualcreditreport.com/index.action to get your reports from Equifax, Experian, and TransUnion.

What if I See Errors?

If you see errors on your credit report, dispute the information with the credit reporting company in writing. Explain what you think is wrong, why, and included documents that support your dispute.

Missed Payments on Credit Reports

The most important detail in the calculation of your credit score is your payment history. This factor alone accounts for 35% of your FICO credit scores. When you miss or make a late payment it can cause significant damage to your credit score, especially if the late payment is recent or severe.

A late payment may remain on your credit report for up to seven years as allowed by the Fair Credit Reporting Act (FCRA). Getting the late payment removed depends on its accuracy.

The FCRA is a federal law that gives you the right to dispute inaccurate information that appears on your credit report. If you check your credit reports and you find that a late or missed payment shouldn’t be there, you can make a dispute to the three credit bureaus: Experian, Equifax, and TransUnion. The best form of contact is by certified mail and you should provide a form of proof that the missed or late payment is inaccurate. When the credit bureaus receive your dispute they have 30 (sometimes 45) days to perform an investigation and they will either delete, update, or verify that your disputed late payment is accurate and inform you of the results of their investigation.

Another situation to look out for is fraud or identity theft. When a late payment appears on your credit reports, it can damage your credit score even if the late payment is attached to an account that isn’t yours.

If you find that there is a fraudulent account (with or without late payment activity) on your credit report, you should visit IdentityTheft.gov to file an identity theft report. When submitting the dispute to the credit bureaus, you will need to include a copy of your ID theft report. Some consumers and even credit repair companies will file fake fraud disputes claiming that the consumer is a victim of identity theft to avoid their liabilities. Filing a false police report or false identity theft affidavit with the FTC is illegal and can cause you serious trouble.

Legitimate late payments are not likely to be removed. Your best shot to have it removed is at the mercy of your creditor to determine whether it will ask the credit bureau to remove the derogatory information. You can take the chance and call or write your creditor to request a goodwill removal. The best chance of getting a removal is if your account has been in good standing. For example, if you’ve had a loan with a lender for several years, you’re current on your loan, and the late payment in question was your first and only delinquency.

Ways to Improve your Credit Reports and Scores

• Pay down credit card debt and keep your payments consistent. When you reduce your credit card balances, your credit utilization rate may decrease as well. Keeping your payments consistent shows that you are consistent with payments. Making large or below minimum payments puts you at risk.

• Ask for a Credit Limit Increase. A higher credit limit reduces your credit utilization rate/ratio and improves your score.

• Become an authorized User. If you have a friend or family member add you to a well-managed credit card as an authorized user, this can help you build positive credit. You should consider asking someone close to you who has a credit card with no missed payments and a low credit utilization ratio.

Avoid future missed payments. Keeping up with your payments helps improve your credit score over time.

Actual Payment Information Suppressed

The biggest credit card companies are suppressing actual payment information on credit reports.

The CFPB reported in 2020 that the largest credit card companies are purposely suppressing customers’ actual payment amounts from their credit reports.  Actual payments are the amounts the borrower repays each month, as opposed to the minimum payments or balance. This means that millions of borrowers are missing key information of their repayment behaviors that impacts their credit. This suppression harms the opportunity to receive better financial offers and costs billions of dollars in interest expenses.

As of 2022, the CFPB reported that Americans paid over $120 billion annually in interest and fees on credit cards and since then the average interest rates charged by credit card companies have been quickly increasing.

Last May, the CFPB sent letters to the CEOs of the nation’s largest credit card companies - JPMorgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express - asking if they furnished actual payment information. They asked why they stopped sending complete data and if they had plans to change their practice.

They learned that:

• One large credit card company took the move first, and the others started suppressing their data shortly after.

• The companies didn’t say when they intended to restart reporting actual repayment information.

• Companies suppress data to limit competition. By withholding information it made it harder for competitors to offer more profitable and less riskier customers better rates, products, or services.

Credit card companies are making it difficult for people to shop for credit and to save money. People expect that their credit behaviors - like paying credit card bills in full each month will be reflected in their consumer reports and credit offer they receive.

More Information from the CFPB: CFPB Summary

Disputes Ignored: Credit Repair Companies to Blame?

There have been a record breaking amount of complaints from 2020 through 2021, with more than 619,000 in 2021 alone and Rep. James Clyburn, the chairman of the House Select Subcommittee on the Coronavirus Crisis wants credit reporting agencies TransUnion, Experian, and Equifax to be investigated.

The agencies have allegedly failed to respond to consumer complaints during the pandemic and continue to have longstanding problems with consumers raising complaints about credit reporting errors.

In May, the CFPB reported that  4.1% of complaints were resolved in 2021 compared to 25% in 2019 before the pandemic.

It appears that the majority of credit report disputes have not resulted in correction or removal of errors in consumers credit reports. The subcommittee found that between 2019-2012:

• Equifax corrected 43% - 47% of disputed items.

• Experian corrected about 52% of late payment disputes or other inaccurate data.

• TransUnion corrected approximately 49% - 53% of disputed credit reports during this time.

The CARES act, paused loan payments and were supposed to report them as current, though some lenders may have incorrectly categorized them as late.

Consumers have been reporting errors on a larger scale. The CFPB estimated the combined number of dispute submissions among Equifax, Experian and TransUnion to be 8 million in 2011. The subcommittee found that in 2021 Equifax received nearly 14 million complaints alone.

The record breaking amount of complaints consist of nearly 336 million items, including names, addresses and credit accounts on their credit reports. Yet evidence by the subcommittee found that credit raters discard millions of disputes a year without investigation. At least 13.8 million were thrown out between 2018 and 2021.

Discarding disputes violates the Fair Credit Reporting Act (FCRA) if they are submitted directly by consumers to authorized representatives.

The companies defense is that disputes are discarded without investigation when they suspect a credit repair service is making the complaint. Which highlights the importance of why you should make complaints yourself, as they may also be disputing information on your report that is accurate.

The agencies have a criteria that determine which disputes may be submitted by an unauthorized third party. For instance, Equifax, tosses out mail that tends to similar language and formatting and also comes from the same zip code.

Experian takes into account for envelope and letter characteristics, this includes same/similar ink color, same/similar formatting when choosing what disputes to discard.

It was found that credit rating companies referred more than half of the disputes to data furnishers for investigations between 2019 and 2021. TransUnion referred the most.

The prevalence of credit reporting errors have been especially concerning at a time when consumers needed access to their credit to handle difficult economic circumstances brought on by the pandemic. Errors in credit reports have the potential to lower credit scores that could deny access to loans, housing, and possibly employment, among other serious consequences.

Recent reports have noted increased activity among credit repair companies which can inflate the complaint numbers. This seems to be the biggest cause of consumer complaints being thrown out. It highlights the importance of making complaints about credit reporting errors yourself rather than relying on a third party, since many credit repair companies may make illegitimate complaints or dispute information on your reports that are accurate.

The credit reporting industry is continuing to to collaborate with the CFBB and policymakers to better serve consumers and will continue to make better economic opportunity solutions.