If you use your debit card to pay for groceries, you may have noticed that by the time you get home, the charge may have already posted to your checking account. Information concerning credit purchases and payments doesn’t appear on your credit report that quickly, but it does get there eventually.
Generally it takes about 30 days for a credit transaction — a purchase, a payment or a missed payment — to travel from a creditor’s books to one of the three major credit reporting agencies (CRAs): Experian, Equifax and TransUnion. But lenders are not legally required to report anything to the CRAs — also known as credit bureaus — and the frequency of reporting varies widely. Some creditors report changes in a customer’s account balance daily, some once a month and some less often.
Creditors that typically report monthly include:
- Banks, credit unions, finance companies and other lenders that issue credit cards or make mortgage, personal, automobile and/or student loans.
- Non-bank credit card issuers (for example, American Express, Diners Club and Discover).
- Department stores.
- Oil and gas companies.
- Any other creditors that receive monthly installment payments.
Once one of the major CRAs receives information on an open credit account, it is responsible to update a person’s credit report as soon as possible. The three CRAs do not necessarily share information, however. And because of the variations in reporting frequency among creditors, some credit reports don’t get updated for months.
If you have paid off a debt and don’t see that information reflected on your credit report, contact the creditor and make sure it has updated your status with the CRA. After making sure the creditor has sent the correct data, you should contact the CRA to make sure your credit report reflects the updated information.
Some businesses provide information to the credit bureaus only when an account is past due — 60, 90, 120 or 180 days — or has been charged off and/or turned over to a collection agency. (A creditor charges off — or writes off — a debt when it decides it is uncollectible.) These creditors include:
- Landlords and property managers.
- Utility companies.
- Local retailers.
- Insurance companies.
- Magazines and newspapers.
- Doctors and hospitals.
- Lawyers and other professionals.
In an effort to increase the amount of data in an individual’s credit profile, credit reporting agencies increasingly are gathering monthly information from utility companies, phone companies and local retailers.
Federal law permits consumers to receive one free copy of their credit report from each of the three major credit bureaus every year. But remember that there is no specific time frame in which a credit transaction will be reported or appear on your credit report.