“John, you spend a lot of time writing about items that appear on our credit reports and how they influence our credit scores. Would you mind writing about the items that do not appear on credit reports and why they don’t appear?”
Ask and ye shall receive.
This is actually a very good idea for a credit report article and the Minter is correct, I do spend a lot of time focusing on items that appear on credit reports and almost none on items that do not.
This will be fun.
Prepaid Debit Cards, Checking Accounts, and Traditional Debit Cards
None of these aforementioned items appear on your credit reports. Debit cards and checking accounts are really the same thing, as a debit card is like a plastic version of a paper check.
And, a prepaid debit card is really not much more than a reloadable gift card with fees.
None of the three items are a true extension of credit, as you’re only able to spend money that is already either: A) loaded on the card, or B) deposited in an account with a bank or credit union.
There is considerable confusion over the prepaid debit card and credit reporting issue because some of the companies and individuals who are paid to endorse these cards suggest they will help your credit reports and scores, which isn’t at all true.
In fact, the credit bureaus now have language in their reporting standards guide that addresses the issue of prepaid debit cards and credit reporting.
It reads, “Do not report prepaid credit cards/gift cards because the consumer has no credit obligation.”
There is, however, one scenario when you checking account could bleed into your credit report: If you have overdraft protection in the form of an unused installment loan that loan can be reported to the credit bureaus.
I personally have one of these on my credit reports and have had it for many years.
Evidence That You Are Now Married
When you get married nobody in the credit industry knows about it.
The credit reporting agencies don’t know about it, your credit scores don’t know about it, and lenders don’t know about it.
There is nothing on a credit report that appears or changes just because you’ve gotten married.
Now, if you choose to apply jointly with your new spouse or you otherwise co-mingle your existing debt obligations and liabilities, then eventually your credit reports will look similar to your spouse’s credit reports because the data will be so similar.
Want some free advice?
Maintain credit independence even after you’re married.
There’s no reason to co-mingle your debts and there’s no reason to jointly apply for credit, except in the instance where you’ll need two incomes to qualify for a loan.
There’s nothing on a credit reports that indicates your salary, your net worth, your debt-to-income ratio, or the amount of money in your wallet, 401K, IRA, SEP, Money Market, brokerage account, or any other savings account.
There is no way to presume someone’s income by looking at his or her credit reports.
This shouldn’t be a surprise because credit reports are supposed to tell a story about your creditworthiness, not your income.
Income and other wealth metrics are measurements of capacity, or your ability to pay a bill. Credit reports and credit scores are supposed to tell a story about whether or you’ll choose to pay your bills.
Public Utilities and Medical Bills
While there are exceptions to this rule most of the time your public utilities and medical bills do not appear on your credit reports month after month like a credit card or auto loan obligation.
If you do see a public utilities or medical bills on a credit report, they are likely there because they’ve gone into default and are being “worked” by a collection agency.
When a utility or medical bill goes into default, the service provider will normally outsource the collection of that bill to a debt collector.
And, debt collectors commonly report liabilities to the credit reporting agencies.
John Ulzheimer is the Credit Expert at CreditSesame.com, and a credit blogger at SmartCredit.com, Mint.com, and the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. You can follow John on Twitter here.