Here’s when credit card companies report to credit bureaus

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Whether you use your credit card frequently or sparingly, your monthly balance activity is tabulated and reported to the three nationwide credit bureaus — Equifax, Experian and TransUnion. These consumer reporting agencies collect information relevant to your credit card usage and financial history, so understanding what facts credit card companies report to the bureaus can help you strategize how to build or maintain good credit. Read on to learn more about when credit cards report and what exactly might end up in your credit card report.

Related: How many credit cards is it reasonable to have?

What Do Credit Card Companies Report to Credit Bureaus?

Credit card companies report a cardholder’s account details to the credit bureaus. This information includes:

  • The number of accounts you have open
  • Any credit card balances you have
  • Any late payments you may have on your account
  • Your revolving credit utilization rate (the percentage of credit used versus the account holder’s overall credit card spending limit across accounts)

How Often Do Credit Cards Report?

Because they’re required to issue statements every billing cycle, credit card companies may report cardholder information to the credit bureaus once a month. Under federal regulations, credit card issuers must adopt “reasonable procedures” to ensure they mail or deliver periodic statements to account holders at least 21 days prior to the account holder’s payment due date as disclosed on the statement, according to the Consumer Financial Protection Bureau.

A credit card statement will show the account holder’s balance and any past due amounts, and the credit card issuer may report that information to Equifax, Experian or TransUnion. You can read your credit card statement to get a detailed summary of your credit card purchases during the billing cycle, among other account details. Creditors are not required to report to every credit reporting agency. In fact, credit card companies have no obligation to report to any of the bureaus. 

Financial institutions, however, are required by federal law and federal regulations to notify customers whenever they choose to report a customer’s late payment or delinquency status to a credit bureau. These financial institutions, such as banks and credit unions, must issue notices either before or within 30 days of reporting a customer’s negative information to a credit bureau, according to the Federal Trade Commission.

When Do Credit Card Companies Report Late Payments to Credit Bureaus?

Credit card companies may report late payments to credit bureaus if the account holder is delinquent by more than 30 days. Experian’s State of Credit report released in 2021 shows that, on average, the United States has 30 to 59 days past due delinquency rates of about 2.3%. Meanwhile, 60 to 89 days past due delinquency rates average around 1%, and 90 to 180 days past due delinquency rates are about 2.5%

 In better news, Experian’s findings also show that U.S. credit card delinquency rates substantially declined in 2021 compared to 2020 and 2019.

When Do Credit Card Companies Report a Canceled Credit Card?

If you cancel or close a credit card account, your credit card company may report that information to the credit bureaus in a matter of days or weeks. Additionally, closing a credit card account may lower your credit score by increasing your revolving credit utilization rate. 

Also keep in mind that although canceling a credit card will close and deactivate the account, the history of the closed account may remain on your credit report for up to 10 years. Any negative information associated with a closed credit card account, such as any late payment history, also could appear on a consumer’s credit report for years after closure. In most cases, the Federal Deposit Insurance Corporation says that a credit bureau “may not report negative information that is more than seven years old or bankruptcies that are more than 10 years old.”

What Credit Bureaus Do Credit Card Companies Report to?

Equifax, Experian and TransUnion are the three nationwide credit bureaus that credit card companies report to voluntarily. Creditors don’t necessarily have to report to every credit reporting agency though.

Credit Card Issuers That Report to TransUnion

TransUnion in its 2020 annual report said that its customer base “includes many of the largest companies in the industries we serve,” including credit card issuers. Based on information published on TransUnion’s website as of November 2021, card issuers that report to TransUnion include:

  • American Express
  • Bank of America
  • Capital One
  • Chase
  • Citi
  • Discover
  • Wells Fargo

Credit Card Issuers That Report to Equifax

Credit card issuers that report to Equifax include “most lenders” in the United States, according to the company’s 2020 annual report. 

“We rely extensively upon data from external sources to maintain our proprietary and non-proprietary databases, including data received from customers, strategic partners and various government and public record sources,” Equifax says in its annual report. “This data includes the widespread and voluntary contribution of credit data from most lenders in the U.S.”

Credit Card Issuers That Report to Experian

Credit card issuers that report to Experian include banks and other potential providers of credit card account data. “Many of our data contributors are also our clients,” Experian states in its 2021 annual report, noting the company has more than 11,000 data contributors in the U.S. “They supply us with data through a give-to-get model. Our ability to combine, clean, sort and aggregate data from thousands of data contributors creates a more complete picture of consumer or business interactions across markets.”

How Does Using a Credit Card Affect My Credit Report?

Using a credit card can have either a positive or negative impact on your credit report, depending on your revolving credit utilization rate and whether your account is in good standing or delinquent. If you maintain low or zero balances and make regular credit card payments on time, that activity would add a positive element to your credit report, which could promote credit score improvement over time.

On the other hand, if you use and maintain your credit card with a high balance, that could reflect poorly on your credit report and possibly cause your credit score to drop. As such, it’s important to understand how credit cards operate and use yours responsibly in order to avoid negative marks on your credit report.

The Takeaway

Having access to credit and opening a credit card account in your name can cultivate financial empowerment and lead to better outcomes in personal finance. Credit card companies may report your revolving credit utilization rate and account balances to Equifax, Experian and TransUnion, so the key to building credit is through carefully measured credit card use, timely payments and low balances.

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This article originally appeared on LanternCredit.com and was syndicated by MediaFeed.org.

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Is it possible to delay credit card payments?

Is it possible to delay credit card payments?

For people who cannot make their credit card payments, credit card debt can quickly pile up, resulting in long-term financial difficulties, and they might be wondering if it’s possible to delay credit card payments.

Fortunately, there may be options depending on a person’s financial situation.

Related: 4 tips for paying off a large credit card bill

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Some credit card companies are providing financial relief programs to their customers in response to financial hardships related to COVID-19. The cardholder can get information about these programs by asking the credit card company about their offerings.

Because of the increase in the volume of information requests, some credit card companies may request cardholders to visit their website for details on each program. Although programs may vary by company, here are some of the relief programs that credit card companies may offer.

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Many credit card companies allow cardholders to reduce or delay credit card payments for a specific amount of time by offering emergency forbearance. Once the forbearance period ends, cardholders will need to make up any skipped or postponed payments.

While the credit card company may not require cardholders to make up payments right away, they will need to begin to make at least the minimum monthly payment. Depending on the new credit card balance, the minimum payment required may have changed.

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Usually, when a cardholder misses a credit card payment, they are charged a late fee. Due to the pandemic, many card companies are refunding or waiving late fees if the customer requests so due to financial hardship.

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Some credit card companies may reduce the interest rate on an account during the pandemic. However, this rate may increase after the specified term ends.

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Some credit card companies help cardholders repay their credit card balance by offering payment plan options. Cardholders may be able to secure a better repayment plan that works for their current financial situation.

Keep in mind that all of these options may vary by creditor. Now, let’s look at some consequences of missing a credit card payment.

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Making a late payment may increase a credit card holder’s balance in several ways. First, credit card companies can charge a late fee of up to $28, even for the first occurrence. If a cardholder misses a payment after that, the late fee could increase to $39. It’s important to note that this fee may not exceed the minimum balance due.

Another way the credit card company may increase the balance is to increase the account’s interest rate. For example, if the cardholder hasn’t made a payment for 60 days, the credit card company may increase the APR to a penalty APR. Increasing the interest rate can also increase the revolving balance on the credit card. However, not all creditors may charge penalty interest.

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Since payment history and account standing are some of the factors used to determine a cardholder’s credit score, making late payments may negatively impact it. But the amount of time a cardholder’s credit is affected can vary depending on the situation.

In general, creditors send the payment information to credit bureaus.  They use codes to identify the standing of the accounts. But since there is no code for a payment that is 29 days late, they may use a credit code to show the card is current. After the payment passes the 30-day threshold, however, the creditor may use the late code instead. Using the late code is considered a delinquent payment to the credit bureaus.

It’s important to note that different creditors may use different codes at different times. So it’s hard to determine when a credit score may be affected by a late payment. While missing a payment may not impact a score initially, it may appear on a cardholder’s score and stay there for several years if it’s a continued occurrence.

Of course, this depends on the situation and the other factors credit bureaus use to figure the credit score.

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Another consequence of making a late payment is that the creditor may not allow the cardholder to use it for other purchases until the card is in good standing. Additionally, if the payment is 180 days late, the creditor may close the account and charge off the balance. If a creditor charges off the balance, it means that the creditor permanently closes the account and writes it off as a loss. However, the cardholder will still owe the outstanding balance remaining on the account.

In some cases, creditors will attempt to recover this debt by using their collections department. In other cases, they may sell the debt to a third-party collection agency that will try to get payments from the cardholder.

Creditors have some flexibility when it comes to working with their customers. For customers who have had financial setbacks such as losing a job, creditors may help them get back on track under FDIC regulations. Usually, this type of flexibility is available for consumers who show a willingness and ability to repay their debt.

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For consumers who find themselves struggling to make their credit card payments and don’t have creditor relief programs available, there are a few other options to consider that may reduce the financial burden of making credit card payments on time.

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balance transfer credit card is a credit card that offers a lower interest rate or even a 0% introductory interest rate. This could allow a consumer to transfer a high-interest credit card debt to a card with lower interest and potentially pay off the debt faster. Usually, balance transfer credit cards have introductory periods that last anywhere between six and 21 months.

Using this method can potentially be a money saver if the consumer no longer uses the high-interest rate credit card and continues to pay down the transferred debt at the lower interest rate. In general, consumers need a solid credit history to qualify for a balance transfer credit card. If approved, consumers can use the new credit card to pay down high-interest debt. Therefore, this can be a solution for credit card debt repayment as long as the cardholder can pay off the debt before the introductory period ends.

However, if the balance isn’t repaid before the introductory period ends, the interest rate typically jumps up. At this point, the balance will begin to accrue interest charges, and the balance will grow.

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With fixed-rate home equity loans, some homeowners may qualify for a lower interest rate using their home as collateral rather than using an unsecured loan (a loan that’s not backed by collateral). Like other types of home equity lines of credit, the terms and interest rate a borrower might qualify for is based on a variety of financial factors.

It’s important to note that borrowing against a home doesn’t come without risks, such as leaving the homeowners vulnerable to foreclosure if they don’t pay back the loan.

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For borrowers who may not want to use their home as collateral, but are struggling to pay down debt, debt consolidation with a personal loan may be a better fit for their situation. Essentially, borrowers use a personal loan with better terms and a lower interest rate to pay off credit card debt.

Using a personal loan to consolidate credit card debt can make monthly payments more manageable and potentially lower payments. Although a credit card consolidation loan won’t magically make debt disappear, getting the debt paid off might make a difference in a person’s overall financial outlook.

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Whether your credit card company offers debt relief programs you qualify for, or you want to explore alternative options for getting out of debt for good, taking steps toward debt repayment may give you peace of mind.

A credit card consolidation loan might be worth considering if you have been making on-time payments on more than one credit card debt and meet the lender’s income and credit score criteria. While credit card debt consolidation is only one solution for accelerating debt repayment, this solution may be what you need to eliminate your debt for good.

Learn more:

This article originally appeared on SoFi.comand was syndicated by MediaFeed.org.


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