Changes Affecting Your Credit Report

The world of credit reporting is constantly changing. You've really got to stay on top of this if you want to maintain a strong credit rating.

Unfortunately, many of us fail to keep abreast of important economic, legal or industry changes that can have a direct impact on our credit health. A survey from the National Foundation for Credit Counseling found that most Americans don't bother to check their credit reports at all — even though federal law gives adults in the United States the right to get those reports free of charge each year from AnnualCreditReport.com.

Here are four recent changes that affect your credit reports and score.

1. Your rental history is now included in your credit reports

Credit bureaus are taking new factors into account when computing your credit rating. — Image Source/Getty Images

For decades, the only housing payments that were tracked by credit bureaus were mortgage payments. Lenders would report whether you paid your mortgage on time and that payment history would be used to help calculate your overall credit score. Now "nontraditional" payments such as monthly rent are also being factored in.

The credit reporting giant Experian even has a unit called Experian RentBureau. It keeps tabs on how well renters are handling their housing obligations. And Experian includes residential rental payment information and rental history on its credit reports — a change that could impact millions of renters nationwide.

So the lesson here is: Pay the rent on time.

2. Your payday loans are being tracked

Speaking of nontraditional items, did you know that the credit industry is also now examining payday loans?

In 2012, FICO, creator of the widely used FICO credit score, rolled out a new credit score in combination with a company called CoreLogic — the FICO Mortgage Score Powered by CoreLogic.

This score takes into account far more data than traditional FICO scores. It's based in large part on transactions that had historically been under the credit radar, such as payday loans, debt settlements and rent-to-own agreements.

Advocates say including this information helps people who have no bank accounts or have "thin" credit files, by allowing them to demonstrate responsible behavior and build credit. But consumer advocates worry that broadening the realm of information contained in credit reports could create problems for low- and middle-income Americans. For instance, if a consumer has a legitimate dispute with a retailer or landlord and withholds payment, the person could nevertheless be reported to the credit bureaus and branded as fiscally irresponsible.

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