Many times consumers will open up a line of credit hoping to rebuild their credit. it will do you no good if the creditor does not report your payment history to the credit bureaus. Creditors are not required to report anything to the credit bureaus by law. The only requirement is that they report accurate information.

Therefore, when you open a line of credit in order to improve your credit, one of the most important questions to ask when applying for a credit card, line of credit, mortgage or auto loan – will the creditor report your payment history to the bureaus? Do your homework!

So why wouldn’t a creditor report? It’s not as easy as you think to be an information furnisher. Reporting to the bureaus requires time, money and effort on the part of the creditor. A creditor is perfectly entitled to report to one credit bureau only if they feel this is the most convenient and efficient business practice for them. Here is what is involved:

• A creditor must meet the minimum requirements for reporting. The used car lot in that not-so-savory part of your city is most likely not going to report your payment history.
• Data Furnishers or Service Agreement must be provided to each bureau, and each one of these agreements are unique.
• Set up the software for reporting in your office. This is optional, some report manually. Many software packages exist to help creditors report data to the credit bureaus.
• Customer’s data is entered into the system.
• The customer needs to make sure the information is compliant with the latest regulations related to the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA) the Equal Credit Opportunity Act (ECOA), the Fair Debt Collections Practice Act (FDCPA) and the Metro 2 format specifications. Most good reporting software packages do a check of the data, but ultimately, the creditor is liable for the information.
• Send in the customer data to each credit bureau
• Update customer’s data on a monthly, daily or weekly data

Also, keep in mind that a creditor needs to fill out separate paperwork to pull a credit report on one of their customers from each credit bureau, which is completely separate from supplying information.

Have you ever opened a line of credit which did not report to the credit bureaus? Please share!

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