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Good payment history on a loan can help boost your credit score. According to FICO, making your payments regularly and on time can improve your score. How well you pay your bills accounts for 35 percent of your overall FICO score. If you have a private mortgage, it's prudent to understand when you may be able to have that loan added to your credit file.
Understanding Federal Law
How a credit bureau handles your information is governed by the Fair Credit Reporting Act. The FCRA requires bureaus to include only accurate information on a consumer's credit report. It also gives consumers the right to dispute inaccurate or false information that appears in their credit file. The credit bureau then has up to 30 days from the dispute date to correct the mistake, but this applies to data currently present on the credit report. If the creditor chooses not to report the mortgage loan, the bureau will not have a record of it.
According to Experian, consumers cannot add a credit account to their credit report. To report credit data to the credit bureau, a business must first become a customer of the bureau and pay a fee for the service. It's not free. If the business is not a customer of the bureau, the bureau does not have a way to add consumer credit accounts from that business to its credit database. Keep in mind that federal law does not require creditors to report to the credit bureaus.
If you have a private mortgage and would like to have it appear on your credit report, contact the lender of your private mortgage. Inform the creditor that the mortgage account is not reporting to the bureaus. If the lender already reports to the credit bureau, then this omission may simply be an oversight. Errors do happen. The lender can correct the error by reporting the loan to the bureaus. If the lender does not report to the bureaus, you can ask if it would be willing to do so. The decision to report or not to report, however, rests with the lender.
You may want a private mortgage to appear on your credit report if you've made your payments on time. If you ever default on the loan, however, the private mortgage may appear on your credit report, even though the lender doesn't report to the bureaus. The reason for this is that the private lender may hire a collection agency to collect on the debt, and many collection agencies report to the credit bureaus. If this happens, the loan will appear on your report as a collection account. Collection accounts can remain on a credit report for up to seven years.