Credit bureaus don't know everything. They depend on lenders and debt collectors to fill in the details of your credit history, good or bad. Private lenders who don't have a business relationship with the bureaus usually don't bother to share your payment information. Even if they try, the bureaus may not be interested.
Bureaus Are Picky
The federal government writes laws on credit reporting to keep your credit history as accurate as possible. Major credit bureaus such as Experian, Equifax and TransUnion are supposed to record only verified data about your credit history. Banks and credit card companies the bureaus have a business relationship with are reliable sources. Someone who says she loaned you money and you paid it back is, in the bureaus' eyes, a lot less trustworthy.
If there's no paper trail of any sort on your loan, you're probably out of luck. If you have a private loan with a promissory note or a seller-financed mortgage, you may have the paperwork to prove your case. Make copies of your payment data, look up the addresses of the big bureaus and send in the copies. Ask whoever you borrowed from to write a letter confirming the facts. The package may convince the bureaus the information is sound.
There are companies that can help you get information to the bureaus, but often for a price. Your rent payments, for instance, don't usually go on your credit report unless your landlord evicts you for nonpayment. Various companies such as William Paid or Rental Kharma will report your payments, provided you make payments through them. There's often a fee attached. Other companies offer similar services for "peer to peer" loans -- loans between individuals rather than banks.
Types of Private Loans
Payments on some types of private loans will go straight into your credit report. Private student loans, for example, are "private" in the sense that they're not coming from the government. The companies that offer them are professional lenders -- banks, credit unions or even the college you attend. These established institutions usually report your borrowing and repayment the same way a credit card company does. If you have this kind of private loan, timely payment definitely helps your score.
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- Experian. "What Are Credit Bureaus and How Do They Work?" Accessed Nov. 2, 2020.
- Fair Isaac Corporation. "What's Not in My FICO® Scores?" Accessed Nov. 2, 2020.
- Fair Isaac Corporation. "How Do Credit Bureaus Get Your Information?" Accessed Nov. 2, 2020.
- Federal Trade Commission. "Free Credit Reports." Accessed Nov. 2, 2020.
- Federal Trade Commission. "Prescreened Credit and Insurance Offers." Accessed Nov. 2, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act § 602 Congressional Findings and Statement of Purpose." Page 1. Accessed Nov. 2, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act § 612. Charges for Certain Disclosures." Page 57. Accessed Nov. 2, 2020.
- Federal Trade Commission. "In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans." Accessed Nov. 2, 2020.
A Durham, NC resident, Fraser has written about law, starting a business, balancing your budget and fighting evictions, among other legal and financial topics.