Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our
Editorial Guidelines and
How We Make Money.
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.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.Modern technology makes it easy for consumers to apply for credit cards, but getting approved is not necessarily a walk in the park. People with poor credit or limited credit history may have difficulty accessing new credit. Lantern by SoFi has a database that makes it easy to compare credit cards and identify possible “credit building” card options.
Photo credit: iStock/Tatomm
SOLC112189
About the Author
Sulaiman Abdur-Rahman
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and currently serves as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
