Changes are coming to your consumer credit report. The way the information on your credit report appears has remained mostly unchanged over the years, but now consumers will have what has been called “Time Series Payment Data” on all reports.
Says John Ulzheimer, Credit Expert at CreditSesame.com, “traditionally, credit card accounts on credit reports have contained balance information only as recent as your prior month’s statement. So, if you just received a statement in the mail with a $5,000 balance, that’s the balance that would appear on your credit report, even if it became quickly outdated because of a payment or new charges. The addition of time series payment data to credit reports now allows for the reporting of your balances, the amount due on your credit card accounts and, most importantly, the amount you actually paid.â€
Time series payment data is helpful because it lets anyone who views your credit report to identify you as being either someone who pays their credit card balance in full each month or someone who carries a balance from month to month. Ulzheimer says this is important because it allows lenders to separate cardholders who are very profitable (interest income) from those who are modestly profitable (interchange income only).
“We all know not paying your credit card balance in full each month leads to expensive interest payments. Now, not paying your credit card in full each month can lead to a lower credit score,†says Ulzheimer.