Help Yourself: Self-Reporting to the Credit Bureaus

Good credit can open doors and help you achieve your financial goals. Bad credit, on the other hand, can limit your opportunities and cost you much more in interest and fees. So, it makes sense to do whatever you can to improve your credit and maximize your credit score. 

Self-reporting your financial activity to the major credit reporting bureaus is a relatively new method of improving your credit. Self-reporting payments, such as rent and utilities, benefits your credit by adding on-time payments that wouldn’t ordinarily appear on your credit report. In this article, you’ll learn what self-reporting is, how it works, what you can report, and how to decide whether self-reporting is a good option for you.

What Does It Mean To Self-Report to Credit Bureaus?

In the U.S., there are three major credit reporting agencies, or bureaus: Experian, TransUnion, and Equifax. These bureaus collect and maintain all the consumer credit data that appears on your credit reports. In the past, only certain debts were reported to the credit bureaus.

Ongoing expenses, such as rent payments, haven’t generally been included in credit reporting and don’t fit neatly into the established credit scoring models. For example, a mortgage account has a balance and an interest rate. But rent usually doesn’t. As a result, traditionally, people who pay their mortgages on time build and improve their credit. But people who pay their rent on time do not. This seems unfair.

Fortunately, credit reporting practices and consumer protection laws are constantly evolving to help level the playing field and make financial opportunities available to as many people as possible. Enter self-reporting, a practice that emerged around 2018. Self-reporting allows people to take more control over what is reported to the credit bureaus and to receive fair recognition for paying their bills on time.

The term “self-reporting” is a bit of a misnomer: You can’t actually send information about your payments to the credit bureaus yourself. Only officially approved data furnishers may report payment activity and other account information to the credit bureaus. To be approved, a data furnisher must generally be some sort of business and meet a variety of data protection, legal compliance, and other requirements.

Since you can’t report your own financial activity to the credit bureaus, you must contract with a third-party service that can independently verify your account and payment information. For example, you can sign up for rent reporting services, such as LevelCredit or PayYourRent, which report your timely rental payments to the credit agencies on your behalf.

What Types of Things Can I Report to the Credit Bureaus?

Some types of financial accounts are almost always automatically reported to the credit reporting agencies. These include, for example, mortgages, auto loans, student loans, personal loans, major credit cards, and most other revolving credit accounts.

You can find out which of your accounts are currently being reported to which credit bureaus by reviewing your credit reports. You’re entitled to a free credit report from each of the three credit reporting agencies every week.

If you have an account that isn’t listed on your credit report, you can contact the lender and request that they report your account and payment activity to the credit bureaus. Keep in mind that not all creditors report to all three bureaus. So, each of your three credit reports could contain different information.

The credit reporting bureaus will also accept payment and account information about nontraditional accounts. Recurring expenses, such as rent payments, are an example of a nontraditional account. An officially recognized data furnisher must report the information for it to be accepted by the credit bureaus.

This means that activities like paying your rent or cell phone bill can now be reported to the credit bureaus. Rent reporting is on the rise, and there are a growing number of officially recognized data furnishers that will report your rent to the bureaus on your behalf. CreditMyRent, Esusu Rent, RentReporters, and PaymentReport are examples of these third-party rent reporting services.

In addition to rent reporting services, there are other third-party self-reporting services that give alternative types of payment accounts and financial activity information to the credit bureaus. Some examples of these reporting services include Experian Boost, eCredable Lift, UltraFICO, and SimpleBills.

How Do Third-Party Credit Reporting Services Work?

Third-party payment reporting services verify and report a variety of nontraditional payments to the credit bureaus on your behalf. These payments could include:

• Phone service payments

• Utility payments, including electricity, gas, or water bills

• Cable and internet payments

• Streaming service payments, such as Netflix or Hulu

So long as you pay these bills on time each month, adding this payment history to your credit report can help increase your credit score. 

Enrolling in these third-party services is generally a quick and simple process. First, sign up for the reporting service itself. Then, within your new reporting service account, link the accounts or bills that you want the service to report to the credit bureaus. For some reporting services, you’ll link the bank or credit card account(s) that you use to pay those bills, rather than linking the billing accounts themselves.

Once you have all your accounts set up and linked, the reporting service will regularly scan the accounts for electronic evidence of your payments. Some reporting services will retroactively scan the account history, going back as far as 24 months, and report your past payments. This instantly adds up to two years of payment history to your credit file. Some services, such as Experian Boost, skip over any late payments and only report on-time payments. Other services, such as eCredable Lift, report all payments, for better or worse.

Rent reporting services operate a little differently. These services typically contact your landlord each month to verify that you paid your rent on time. Some rent reporting services require your landlord to set up their own account with the service. Before signing up for a rent reporting service, find out what sort of verification is required, then consult with your landlord to be sure they’re on board with participating. 

What Are the Advantages of Reporting My Own Payment Information?

Many of the more traditional ways to improve your credit, such as getting a credit-builder loan or opening a secured credit card account, require you to take on new debt. But self-reporting your payment activity to the credit bureaus allows you to boost your credit without taking on any additional debt. Instead, self-reporting allows you to use the monthly bills you’re already paying to help build your credit history and increase your credit score. If you already have to pay rent each month — likely your biggest monthly expense — why not use it to help build your credit?

Payment history accounts for 35% of your credit score under the FICO 8 credit scoring model, which is currently the model most often used by lenders. By self-reporting your nontraditional accounts, you can increase the number of positive accounts that appear on your credit report. Positive accounts are active accounts that are in good standing and have established, on-time payment records. This can be especially helpful if you’re just getting started and your credit history doesn’t contain much information. Positive accounts can also help counteract negative items in your credit report. The longer you keep self-reporting, the stronger your scorable payment history will become, which should help your credit score continue to rise.

What Are the Disadvantages of Self-Reporting?

At first glance, self-reporting may look like a miracle cure for struggling credit: A chance to dramatically increase your score in a relatively short time, without needing to change your lifestyle or take on additional debt. While all those things are true, there are a few important drawbacks to watch out for.

Some of the disadvantages of self-reporting stem from the fact that it’s still a relatively new practice. As such, many variables can affect whether the strategy yields a significantly higher credit score. One of these variables is the credit reporting bureaus. Most self-reporting services report your payment information to one or two of the three major credit bureaus. Very few reporting services report to all three bureaus. 

For example, Experian Boost only reports payment activity to Experian. This means that your self-reported data appears on your Experian credit report, but not on reports from the other two bureaus. In this scenario, if a lender pulls your credit report from TransUnion or Equifax instead of Experian, your rent and other self-reported activity won’t show up, which means they won’t help your credit score at all.

Scoring models are another variable that can make or break the effectiveness of self-reporting. FICO 9 and FICO 10 are the latest FICO scoring models. They were released in 2014 and 2020, respectively. Both FICO 9 and 10 account for self-reported payments like rent and utilities when calculating your credit score. But their predecessors, FICO 8 and older, do not consider these kinds of payments at all. 

In other words, if a lender is using FICO 9 or 10, your self-reporting efforts can dramatically improve your credit score. If a lender is still using FICO 8, your self-reported activity likely won’t matter. As time goes by, more lenders upgrade to the newer credit scoring models. Today, though, FICO 8 remains the most widely used scoring tool.

Although FICO currently dominates the credit scoring scene, it’s worth noting that FICO’s competitor, VantageScore, considers rent and other nontraditional payments in versions 3.0 (released in 2013) and 4.0 (released in 2017), but not in previous versions.

Another disadvantage of self-reporting is the cost involved. Some self-reporting services are free, but most charge startup fees, ongoing monthly fees, or both. Before enrolling in a service, evaluate the total cost of the service relative to your potential score benefits and the likelihood of reaping those benefits.

Let’s Summarize…

In many cases, self-reporting your account information and payment activity to the major credit bureaus is a smart way to bulk up your credit report and improve your credit score. Self-reporting can potentially deliver a noticeable credit boost in much less time than other credit-repair strategies, such as opening and successfully managing a secured credit card or credit-builder loan. Also, as you continue to self-report and add on-time monthly payments to your credit file, your credit will continue to improve. 

Keep in mind, though, that self-reporting is a fairly new credit tactic, and the results aren’t guaranteed. Variables beyond your control, such as a lender’s software version and bureau preference, can significantly alter the effectiveness of self-reported information. Before signing up for any self-reporting service, be sure to weigh the potential benefits against the costs and risks.