Can I Have My Mortgage Payments Reported to the Credit Bureaus to Increase my Credit Scores?
The NFCC often receives questions from readers about their money challenges. We answer common questions in our Ask an Expert series to help readers find the information they need.
Question: My credit score is very low because of medical bills. I also own three homes and I make my mortgage payments on time. I’ve been working on improving my score so I can refinance. If my mortgage payments were reported to the credit bureaus, would it help? If so, how can that be done?
Answer: Dear Reader,
Medical debt is an issue that affects 36% of U.S. households, and one in five households has past-due medical bills. So unfortunately, you’re not the only one with medical bills hurting your credit. However, it’s great that you’re proactively looking for ways to improve your credit scores.
You asked if reporting your on-time mortgage payments to the credit bureaus can help increase your credit scores. The simple answer is “yes.” Payment history is the main factor used to calculate your credit scores, so on-time debt payments are crucial to improving your scores.
If on-time payments for your mortgages appear on your credit reports, you will likely see significant growth in your scores. With that said, there are a few aspects of your question I want to address separately, so I’ll break it down further below.
What to do if your mortgage payments aren’t on your credit reports
Based on your question, I’m guessing you’ve already reviewed all three of your credit reports (from Experian, Equifax and TransUnion) and found your mortgage payments missing.
If you haven’t reviewed them, your first step is to visit AnnualCreditReport.com and pull all three of your credit reports. This website is free to use and it’s the only federally authorized source for your full reports.
Should you discover the mortgages are not on one or more of your reports, you’ll need to find out why so you can correct the situation. There are a few potential explanations:
- The lenders do not report payment information to the national credit bureaus.
- There’s a clerical error making it impossible to match the loan information to your credit reports. For example, your name may be spelled incorrectly or there’s an incorrect digit in your Social Security number.
If the mortgage companies don’t report to the credit bureaus, there’s nothing you can do to force them. However, if they have an error in their records, you should work with them to fix it and have them update their reporting.
Other ways to improve your credit scores
Whether or not the mortgages are reported on your credit reports, you can look for other ways to increase your scores. If you schedule an appointment with one of our NFCC-certified credit counselors, they can read each of your credit reports and offer personalized tips for gaining points. They can also offer strategies for managing medical debt.
Without knowing the specifics of your situation, I can only make general suggestions for improving your scores. Here are a few things I recommend:
- If you still owe money to your medical providers, contact them to see if you qualify for hardship programs, discounts or a low monthly payment arrangement. This may help you prevent more unpaid debt from appearing on your credit reports.
- For any open credit cards or loans you have, make at least the minimum payment by the due date each month. Missing just one payment can drastically lower your scores.
- If you have credit card debt, focus on paying your credit cards off as soon as possible. This will help reduce your credit utilization ratio and improve your scores. If you need help managing credit card debt, you may want to enroll in a debt management plan (DMP).
Requirements to qualify for a mortgage refinance
Good credit is not the only requirement to qualify for a mortgage refinance loan. Just like with a mortgage, you’ll have to provide verification of your employment, income, debt and even savings.
If your mortgage payments can’t be reported to the credit bureaus, there are a few potential workarounds:
- Tell the refinance lender about your payment history on your mortgages. The lender might be willing to consider a letter from your mortgage lenders that confirms your excellent payment history.
- Check to see if one of your current mortgage lenders offers loan refinancing. If so, they may be more likely to take your mortgage payment history into consideration.
There will also be an equity requirement to qualify for refinancing. Usually, refinance lenders want you to have at least 20% equity in your home, meaning the value of the property is 20% higher than the amount you still owe. If you don’t have this much equity, you’ll need to focus on paying down your mortgage balance and/or increasing your property value before you can qualify.
You’ll also have to be able to cover closing costs, which include appraisal fees, points, title searches, title insurance, and loan application fees.
At the risk of sounding like a broken record, I highly recommend speaking with an NFCC-certified credit counselor for guidance. Each counselor can offer professional advice on how to qualify for mortgage refinancing and other loans. Getting involved in the refinancing process without being ready can be detrimental, so it’s better to start the process out on the right foot.
I wish you the best of luck!
Sincerely,
Bruce McClary, Vice President of Communications
Bruce McClary is the Vice President of Communications for the National Foundation for Credit Counseling® (NFCC®). Based in Washington, D.C., he provides marketing and media relations support for the NFCC and its member agencies serving all 50 states and Puerto Rico. Bruce is considered a subject matter expert and interfaces with the national media, serving as a primary representative for the organization. He has been a featured financial expert for the nation’s top news outlets, including USA Today, MSNBC, NBC News, The New York Times, the Wall Street Journal, CNN, MarketWatch, Fox Business, and hundreds of local media outlets from coast to coast.
