Dear Debt Adviser,
A recent credit score report from TransUnion states that I “have no real estate accounts that can be used in determining a credit score.” Yet I do have a mortgage in good standing with a credit union that does not show up on my credit report. Would it be worth the effort to have this mortgage included, and how would I go about doing so?
Your problem is more common than you might expect, although I don’t usually see it from mainstream lenders. An estimated 15 million consumers in the U.S. have mortgages that are not reported to the credit bureaus, according to Michael Nathans, the founder of Pay Rent, Build Credit, Inc. in Annapolis, Md. Nathans has been working for years to empower consumers with the ability to have their regular bill payments — often referred to as alternative or nontraditional credit information — included in credit decisions. I’ll come back to this later.
I predict that one of the other bureaus will have your mortgage listed. It would be unusual for your credit union not to have a relationship with at least one of the bureaus. It is more likely that the credit union does not have a relationship with TransUnion. So, I suggest you begin by checking your credit reports from the other two major credit bureaus — Equifax and Experian. You can access a free copy of your credit reports annually at www.AnnualCreditReport.com. Review your reports for accuracy and dispute any inaccurate or out-of-date information with the bureau that reported it.
- Check all three credit reports.
- Ask your lender to update your file.
- Keep your own records.
Should you find that your mortgage does not appear on any of your credit reports from the major credit bureaus, I recommend you contact your credit union and ask what its policy is on reporting mortgage loans. Reporting your loan may have slipped through the cracks and once the credit union is alerted, it will be a simple matter of sending in the account activity to the bureaus.
It could be that your credit union does not have a relationship with any of the credit bureaus, particularly if it’s very small. If that is the case, the bureaus will not contact your lender for information, and your account will not be included on that bureau’s report. Creditors are not required by law to report information to the credit bureaus, and likewise, the credit bureaus are not required to request information from creditors who do not have a financial relationship with the bureau such as landlords, small or private lenders or many utilities.
Unfortunately, there isn’t a practical way for a consumer to add nonreported accounts or payment histories to their bureau files. In order for accounts to be included in your bureau reports and scores, the source of the information must meet specific requirements under the Fair Credit Reporting Act, including updating a reported account regularly via the bureaus automated reporting system.
Some good news for consumers is Section 202.6 (b)(6) of the Equal Credit Opportunity Act establishes a consumer’s right to present all of his recurring monthly payment history in establishing his creditworthiness, and that information must be considered by a lender if it is available. Nathans, mentioned above, is now working on a Web-based, secure, consumer self-storage application for bill-paying information that should meet this requirement, enabling consumers to present their financial file to any lender and have it scored.
Until that happens, if your account does not appear on any report, I suggest that you keep a copy of your annual mortgage statement from your lender, the one you get for your taxes at year-end. It will show your payments and any fees you may have paid if you were late. Then, you can show any potential lender that you have a mortgage loan in good standing with your credit union that hasn’t been reported on your credit report, and you’ll be able to offer documentation of the loan when applying for credit.