How does account information end up on your credit report? The answer to this can be complicated and depends on many factors, including what type of account it is, who the creditor is, whether the creditor is a bureau subscriber, whether the creditor is affiliated with an association that is a subscriber, what service agencies they tell which credit reporting agencies and whether the account has been turned over to a collection agency. Members of credit reporting agencies can obtain reports, while subscribers can report and perform credit checks.
Large and medium-sized creditors have underwriters’ accounts with the agencies; they pay fees for the right to report consumer account information and separate fees for making inquiries about consumers. Although it’s unclear what large and mid-sized creditors pay, smaller creditors can often open accounts with the agencies, paying a setup fee of about $300 and a monthly fee of $50, allowing them to report at will.
Equifax and Experian do not deal directly with owners, so owners must open accounts with an organization that the agencies already do business with. In Equifax’s case, it’s the National Association of Independent Owners (NAIL), a third-party owner reporting organization, which charges its customers $60 per month. In turn, NAIL will provide the information to credit reporting agencies. This allows owners to report at will. Experian also does business with a couple of third-party companies: Landlord Protection Services and Allied Residence.
As an interesting aside, when NAIL reports that an item is delinquent and then the landlord requests that the item be removed, NAIL will not remove the item. NAIL states that it will only report such an account as a zero balance, but will not direct Equifax to delete it. There is no justification for this position; It’s another case of bully syndrome. NAIL is simply a provider of information from the original creditor (the lessor) to Equifax. If NAIL does this in practice, such interference is a direct violation of the FCRA and likely also violates state statutes on Unfair and Deceptive Acts and Practices (UDAP). If you encounter this problem with NAIL or any credit reporting agency, be sure to notify the FTC and the attorney general (in your state and in Texas, the state in which NAIL operates) immediately, and consider legal remedy when correspond. (Credit reporting agencies have no problem being told by a provider to change information, either from negative to positive or vice versa, or to remove it altogether.)
