6 things you didn't know that are in your credit report
By Dawn Papandrea
January 29, 2016
Even if you know that checking your credit reports from each of the three major credit bureaus once a year should be on your to-do list, you might be surprised by some of the items they contain.
“People just don't realize all the weird little things that can show up on their credit reports. It's not just big-ticket debts like credit cards, mortgages and student loans,” says Howard Dvorkin, CPA and personal finance expert for Debt.com.
Take a look at these six weird little — and not so little — things that could be in your credit report.
1. Past indiscretions. You know how when you were in grade school and your teachers would warn that bad conduct would go on your permanent record? Credit reports are sort of like that, although instead of being permanent, money mistakes stick around for seven-plus years. “Reporting your delinquencies to the credit bureaus is a free and easy way of scaring you into paying what you owe — because those little things can add up, dragging down your creditworthiness and making future loans more expensive,” says Dvorkin. That reporting results in the “negative accounts” section on your credit file, which lists the date you were first delinquent, the amount owed, the balance and status of the payment.
People just don't realize all the weird little things that can show up on their credit reports. It's not just big-ticket debts like credit cards, mortgages and student loans.”
— Howard Dvorkin, personal finance expert
Why it matters: Anyone pulling your credit report gets a snapshot of your past activity — the good, bad and the ugly. The older your delinquency, the less impact it is likely to have on your credit score (assuming you've since cleared up the problem). Still, if you were expecting those financial missteps to just go away, you're in for seven years of bad marks on your credit report.
2. Accounts in collections. Any debt that was sold by a creditor to a third-party collection agency can appear on your credit report, says Ken Chaplin, senior vice president at TransUnion, one of the three major credit bureaus. (The others are Equifax and Experian.) “Things like utilities, cellphone bills and other sorts of items can show up if you end up late in making your payments or try to walk away,” he says. Even library fines for books you forgot to return could end up biting you. “It's important that whenever you're entering into a borrowing activity, even something like a book, that you understand what will happen if you're late in paying it back,” says Chaplin.
Why it matters: Accounts ending up in collections give the impression you didn't bother to take care of your obligations. In reality, it could have been a mistake or oversight, but a potential lender won't know that. “If someone makes a claim that they owe you money, you have to address it. Ignoring it is when problems happen,” says Chaplin. Face down these demons head on and get any collection mistakes corrected, or they'll stain your report indefinitely.
3. “Doctored” bills. “One thing that often surprises people is that delinquent medical bills can show up on credit reports,” says Chaplin. He actually had that very scenario happen to him after moving caused him to miss a $20 copayment bill in the mail. “Two years later, that unpaid copay was on my credit report, and I had to go through hoops to get it off,” he says.
Why it matters: With medical office and insurance errors, your credit is negatively affected if you try to wait it out. What's more, Chaplin says that medical fraud is increasing, so examining your credit report is a good way to catch it before any bill errors spiral out of control.
Things like utilities, cellphone bills and other sorts of items can show up if you end up late in making your payments or try to walk away.”
— Ken Chaplin,
senior vice president at TransUnion
4. Driving-related debt. Not paying speeding tickets or skipping toll road payments could also cause a credit crash. “If you get a bill in the mail tied to your license plate, get those taken care of,” says Chaplin.
Why it matters: Any debt avoidance illustrates to a potential creditor that you're a risk. If you're disputing a ticket and don't want to pay, that's OK, as long as you do so within the time period before your fine is reported as delinquent.
Your public dirty laundry. “The credit reporting agencies collect information from public records, including bankruptcies, tax liens and judgments from federal, state or U.S. court records,” says Kareem Rogers, senior vice president of Global Consumer & Business Services at Equifax.
Why it matters: When evaluating your creditworthiness, banks and lenders look at the big picture to get a sense of your financial history, and matters of public record are part of that. While you can begin to improve your credit score after declaring bankruptcy or clearing up a tax debt, note that the events themselves will appear on your credit reports for up to seven to 10 years.
5. Rent. Not paying your rent on time can lead to eviction, but it also can cause trouble the next time you go apartment hunting, says Rogers. In fact, many landlords are reporting rental activity on a regular basis through fairly new bureau programs such as TransUnion's ResidentCredit and Experian's RentBureau.
Why it matters: Reporting of rent payments can be a great thing for you if you're a model tenant, says Chaplin, although not all landlords do so. If you're looking to build your credit, it's a good idea to ask your property manager to report your positive payment history to the credit bureaus.
The credit reporting agencies collect information from public records, including bankruptcies, tax liens and judgments from federal, state or U.S. court records.”
— Kareem Rogers,
senior vice president of Global
Consumer & Business Services
Now that you know some of the things what to look for in your credit reports, here's a quick list of things you'll never find in there:
- Income. “A misconception is that as you advance and start to make more money, it will improve your credit score. That's not the case,” says Chaplin. Income levels and salary are not included on credit reports.
- Cellphone payments. Nearly half of people in a TransUnion survey said that paying their phone bills helped their credit score. That's incorrect. Only not paying could potentially have an effect since monthly cellphone bills are not reported to the agencies.
- Your own inquiries. While it's true that hard inquiries or applications for new credit will show up on your credit reports and slightly drop your score, you can view your own reports as much as you want without an adverse effect.
Note that your three credit reports will not always match up, says Dvorkin. “That's because all your lenders don't necessarily tell all three bureaus what's going on with you — and the law doesn't require them to.” In truth, a number of financial institutions report with just one bureau. That's why lenders sometimes look at the credit scores generated from all three reports and take an average.
The best way to familiarize yourself with what is and is not included on your credit reports is to look them over at least annually. You can pull each bureau's credit report for free once a year from AnnualCreditReport.com. That way if there are any surprises, you can address them accordingly.