How does account information end up on your credit report? The answer to this can get complicated and depends on many factors, including what type of account it is, who the creditor is, whether the creditor is a subscriber to a bureau, whether the creditor is affiliated with an association that is a subscriber, what service bureaus feed to which credit reporting agencies, and whether the account has been turned over to a collection agency. Members of credit reporting agencies can pull reports, while subscribers can report as well as run credit checks.
Large to midsize creditors have subscriber accounts with the bureaus; they pay fees for the right to report consumer account information and separate fees for running inquiries on consumers. Although it’s unclear what large to midsize creditors pay, smaller creditors can often open up accounts with the bureaus, paying a setup fee of around $300 and a monthly fee of $50, which enables them to report at will.
Equifax and Experian do not deal directly with landlords, so landlords must set up accounts with an organization the bureaus already do business with. In the case of Equifax, this is the National Association of Independent Landlords (NAIL), a thitd-party landlord reporting organization, which charges its clients $60 per month. In turn, NAIL will furnish the information to the credit reporting agencies. This enables landlords to report at will. Experian likewise does business with a couple of third-party companies-Landlord Protection Services and Allied Residence.
As an interesting aside, when NAIL reports an item as delinquent and then a landlord later requests that the item be removed, NAIL will not remove it. NAIL claims it will only report such an account as a zero balance but not instruct Equifax to remove it. There’s no justification for this position; it’s another case of the bully syndrome. NAIL is simply a purveyor of information from the original creditor (the landlord) to Equifax. If NAIL does this in practice, such meddling is in direct violation of the FCRA and probably also violates state Unfair and Deceptive Acts and Practices (UDAP) statutes. If you run into this problem with NAIL or any credit reporting agency, be sure to notify the FTC and the attorney general (in your state and Texas, the state in which NAIL operates) immediately, and consider a legal remedy where appropriate. (Credit reporting agencies have no problem with a furnisher’s instructing them to change information-whether from negative to positive or visa versa-or delete it entirely.)