If you have checked your credit reports and found that the balance is incorrect, there may be a good reason. Credit reports display the most recent balance of your credit card as reported by your credit card issuer. Due to the timing of credit report updates, this balance may not reflect the current balance on your credit card.
How to Report Balances to Creditors
Throughout your credit card billing cycle, your credit card balance changes several times as payments, credits, purchases, fees, and interest are added to your account. Your credit card issuer does not report your credit card balance to credit bureaus daily, so these daily fluctuations are not reflected in your credit report.
Many credit card issuers report your credit card balance only at the end of your billing cycle. This is the balance that appears on your credit card billing statement. This balance will appear on your credit report every day until it is updated again at the end of the next billing cycle.
If you have made any payments or purchases since the end date of the previous billing cycle, the balance in your credit report will not match what you see when you log into your credit card account online. Although this may seem like an error, it is actually that your credit card balance has not yet been updated in the credit report. It can take one to two months for paid amounts to appear on your credit report and impact your credit score.
To have a specific balance appear on your credit report, pay down your credit card balance to that amount, then wait until after the end of your billing cycle to make any other purchases using your credit card. Remember that finance charges are usually added to your balance at the end of the billing cycle, and this may affect the amount you need to pay to reach the desired balance.
High Balance on Credit Report
In addition to the most recent balance reported for your credit card, your credit report also includes a high balance. This balance is the highest balance reported to credit bureaus for that credit card account.
This high balance remains unchanged each month unless a higher credit card balance is reported. While some creditors and lenders may include the high balance in a manual evaluation of your creditworthiness, this balance is currently not included in your credit score.
The Importance of Your Balance
Your balance is considered the second most important factor in calculating your credit score. Specifically, credit reporting agencies look at the ratio of your credit card balances to their credit limits, which is known as your credit utilization ratio.
For example, if you have a credit card with a limit of $7,000 and a balance of $2,000, that gives you a credit utilization ratio of 28.5%. To maximize your credit score, it’s best to keep balances below 30% of your credit limits, and the lower that percentage, the better. If your credit reports show high balances for your credit cards, it could negatively impact your credit score.
If your credit card balances are inaccurate, your credit score may be lower than it should be, so it’s important to report them to the credit agency.
Correction
Incorrect Information
If your credit card balance is incorrect – for example, you paid off your balance several months ago but that is not reflected in your credit report – you can dispute the credit report. This request will require the credit card company to provide the most recent balance.
You can get a copy of your report from each credit bureau for free once a year at AnnualCreditReport.com. You also have the right to a free copy of your credit report when a negative decision is made regarding your credit, such as being denied for a credit card. To report an inaccuracy, visit the reporting agency’s website. The reporting agency will typically investigate the error within 30 days.
Frequently Asked Questions
When do credit cards report information to credit bureaus?
There is no specific time frame that credit card companies need to report information to credit bureaus. Credit card companies are not required to report your information at all, although it is very likely that they will report to at least one bureau. If they report to one of the three major bureaus, they can report the information anytime they wish, as long as it happens at least once a month.
How do I report credit card fraud?
If you know you do not owe a balance, but both the reporting agency and the credit card company say the balance is accurate as reported, you may be a victim of credit card fraud. In this case, you should review every transaction in your credit card account and identify which ones are fraudulent. Report those unauthorized charges to the credit card company (and the quickest way to do this is by phone). The new balance should be reflected in your credit report soon after those charges are removed by the credit card company.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editing process to learn more about how we verify facts and maintain the accuracy, reliability, and quality of our content.
Experian. “What Is a Credit Utilization Rate?” Accessed Nov. 28, 2021.
MyFICO. “What’s In My FICO Scores?” Accessed Nov. 28, 2021.
Equifax. “You Ask. Bev Answers: How Often Do Credit Card Companies Report to the Credit Bureaus?” Accessed Nov. 28, 2021.
Source: https://www.thebalancemoney.com/credit-card-balance-wrong-960414
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