26:["$","$L27",null,{"category":"$28","relatedArticles":[{"id":"cG9zdDo2MDQ3Mg==","databaseId":60472,"postId":60472,"author":{"node":{"id":"dXNlcjo2Mg==","databaseId":62,"userId":62,"avatar":{"url":"https://secure.gravatar.com/avatar/208d0b234f483fab41fdc0c47e058dd2?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Lauren Perez writes on a variety of personal finance topics for SmartAsset, with a special expertise in savings, banking and credit cards. She is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. Lauren has a degree in English from the University of Rochester where she focused on Language, Media and Communications. She is originally from Los Angeles. While prone to the occasional shopping spree, Lauren has been aware of the importance of money management and savings since she was young. Lauren loves being able to make credit card and retirement account recommendations to friends and family based on the hours of research she completes at SmartAsset.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Lauren","fullName":"Lauren Perez, CEPF®","lastName":"Perez, CEPF®","name":"Lauren Perez, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":87,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"lperez","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo0NzIw","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":4720,"categoryId":4720,"link":"https://smartasset.com/credit-cards/articles","name":"Credit Cards","postCount":{"pageInfo":{"offsetPagination":{"total":89,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"credit-cards","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$29","date":"2017-01-30T13:00:10","excerpt":"

\n","featuredImage":{"id":"cG9zdDoxOTIyNzc=","databaseId":192277,"altText":"Are Credit Card Rewards Taxable?","date":"2023-03-21T02:11:56","fileSize":40770,"mimeType":"image/jpeg","modified":"2023-03-21T02:11:56","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2017/01/rsz_istock-185075795-1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-3-21","readable":"March 21, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/credit-cards/are-credit-card-rewards-taxable","metaDesc":"You may have wondered: Are credit card rewards taxable? In some cases, they are. If you earned miles, cash back or points when you signed up for a new...","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":4,"title":"Are Credit Card Rewards Taxable? - SmartAsset","__typename":"PostTypeSEO"},"slug":"are-credit-card-rewards-taxable","status":"publish","title":"Are Credit Card Rewards Taxable?","uri":"/credit-cards/are-credit-card-rewards-taxable","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjo2Mg==","databaseId":62,"userId":62,"avatar":"$2a","description":"Lauren Perez writes on a variety of personal finance topics for SmartAsset, with a special expertise in savings, banking and credit cards. She is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. Lauren has a degree in English from the University of Rochester where she focused on Language, Media and Communications. She is originally from Los Angeles. While prone to the occasional shopping spree, Lauren has been aware of the importance of money management and savings since she was young. Lauren loves being able to make credit card and retirement account recommendations to friends and family based on the hours of research she completes at SmartAsset.","additionalMeta":"$2b","email":null,"firstName":"Lauren","fullName":"Lauren Perez, CEPF®","lastName":"Perez, CEPF®","name":"Lauren Perez, CEPF®","postCount":"$2c","slug":"lauren-perez-cepf","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo0NzIw","children":"$2f","databaseId":4720,"categoryId":4720,"link":"https://smartasset.com/credit-cards/articles","name":"Credit Cards","postCount":89,"slug":"credit-cards","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

Credit card companies will do almost anything to get you to sign up for their cards. Some offer travel miles and others use sign-up bonuses to entice customers. No doubt those incentives sound great and they may have tricked you into applying for a credit card or two. There are plenty of benefits to earning rewards. But there’s one downside that you’ll have to consider: Your credit card rewards may be taxable.

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Which Credit Card Rewards Are Taxable?

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The only rewards that have to be reported to the IRS are those that are considered income. Taxable credit card rewards include any bonuses or gifts you receive just for signing up for a card, including bonus travel rewards (especially if they can be reported as a monetary amount). But since assessing the value of airline miles can be tricky, credit card issuers often have to use discretion when deciding how to report taxable rewards to the federal government.

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Generally, credit card issuers are required to report awards and prizes to the IRS when the value of those rewards is higher than $600. That means that if you received a $650 or $800 sign-up bonus, your credit card company will send you a 1099 form.

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Which Credit Card Rewards Aren’t Taxable?

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The points or miles you earn from making purchases with your rewards credit card are usually tax-free. According to the IRS, those rewards are considered discounts rather than income. Sign-up bonuses aren’t taxable either if you have to spend a certain amount of money in order to qualify for the reward.

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If you’re not sure whether your credit card rewards are taxable, it’s best to review your credit card terms and conditions. If your paperwork doesn’t say that you need to report your rewards to the IRS and you don’t receive a 1099-MISC form, you probably won’t have to worry about mentioning your credit card rewards when you file taxes.

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What To Do If You Get a 1099-MISC Form

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If you receive a 1099 Form in the mail, it’s best to avoid chucking it into the trash. The IRS will get a copy of the form as well. So if you fail to report your taxable credit card rewards, you could get hit with a penalty.

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When you’re ready to complete your income tax return, you’ll include your taxable rewards as you add up the total amount of income you’ve received for the year. If you need help preparing your tax return, you can meet with a tax accountant.

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Earning Rewards for Business Purchases

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Rewards from business credit cards are treated differently than rewards earned while using personal credit cards. Your rebates must be subtracted from the cost of the items you’ve purchased and reported. If you’re trying to get a tax break for your business expenses, your rebate reduces the amount of money you can deduct on your tax return.

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If you’re reimbursed for business-related items you’ve purchased with your personal credit card, the money you receive from your boss won’t count as income. But the credit card rewards you earned through the transaction may need to be reported.

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Related Article: Can You Invest With Credit Card Rewards?

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Bottom Line

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Not all credit card rewards are taxable. That’s why it’s important to know which ones are subject to taxation before filing your tax return. It’s best to thoroughly read over your credit card agreements to find out whether they indicate that your rewards may be taxed. And when in doubt, you can ask a tax professional for assistance.

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Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to up to three registered investment advisors who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

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Photo credit: ©iStock.com/jhorrocks, ©iStock.com/courtneyk, ©iStock.com/DGLimages

"],"experts":null,"link":"/credit-cards/are-credit-card-rewards-taxable","published":{"datetime":"2017-1-30","readable":"January 30, 2017"},"shareInfo":{"title":"Are Credit Card Rewards Taxable?","origin":"/credit-cards/are-credit-card-rewards-taxable"},"isNewsArticle":false},{"id":"cG9zdDo2NTg1Ng==","databaseId":65856,"postId":65856,"author":{"node":{"id":"dXNlcjo1Nw==","databaseId":57,"userId":57,"avatar":{"url":"https://secure.gravatar.com/avatar/a4ba5699dffd6ba2dae17837c96b683a?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Derek Miller is a graduate of the University of Edinburgh where he studied economics. He is passionate about using data to help people make better financial decisions. Derek is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He is a data journalist whose expertise is in finding the stories within the numbers. Derek's writing has been featured on Yahoo, AOL and HuffPost. He believes the biggest financial mistake people make is waiting too late to save for retirement and missing out on the wonders of compounding interest. Derek lives in Brooklyn.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Derek","fullName":"Derek Miller, CEPF®","lastName":"Miller, CEPF®","name":"Derek Miller, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":254,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"dmiller","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo0NzIw","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":4720,"categoryId":4720,"link":"https://smartasset.com/credit-cards/articles","name":"Credit Cards","postCount":{"pageInfo":{"offsetPagination":{"total":89,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"credit-cards","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$31","date":"2017-06-08T13:00:17","excerpt":"

Most golfers have a course in mind when they think of their favorite place to hit the links. But what about certain cities? With plenty of warm sunny days, affordable housing and a wide range of golf courses, some cities are better suited for regular trips to the course. SmartAsset looked at these and other […]

\n","featuredImage":{"id":"cG9zdDo2NTg1Nw==","databaseId":65857,"altText":"The Best Cities for Golfers to Live","date":"2017-06-06T09:01:13","fileSize":69880,"mimeType":"image/jpeg","modified":"2017-06-06T09:01:13","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2017/06/rsz_istock-543077444.jpg","__typename":"MediaItem"},"modified":{"datetime":"2017-6-8","readable":"June 8, 2017"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/credit-cards/the-best-places-for-golfers-to-live-in","metaDesc":"Gilbert, Arizona; Winston-Salem, North Carolina, Scottsdale, Arizona; Fort Wayne, Indiana and Portland, Oregon are some of the best cities for golfers.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":9,"title":"The Best Cities for Golfers to Live In - SmartAsset","__typename":"PostTypeSEO"},"slug":"the-best-places-for-golfers-to-live-in","status":"publish","title":"The Best Cities for Golfers to Live In","uri":"/credit-cards/the-best-places-for-golfers-to-live-in","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjo1Nw==","databaseId":57,"userId":57,"avatar":"$32","description":"Derek Miller is a graduate of the University of Edinburgh where he studied economics. He is passionate about using data to help people make better financial decisions. Derek is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He is a data journalist whose expertise is in finding the stories within the numbers. Derek's writing has been featured on Yahoo, AOL and HuffPost. He believes the biggest financial mistake people make is waiting too late to save for retirement and missing out on the wonders of compounding interest. Derek lives in Brooklyn.","additionalMeta":"$33","email":null,"firstName":"Derek","fullName":"Derek Miller, CEPF®","lastName":"Miller, CEPF®","name":"Derek Miller, CEPF®","postCount":"$34","slug":"derek-miller-cepf","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo0NzIw","children":"$37","databaseId":4720,"categoryId":4720,"link":"https://smartasset.com/credit-cards/articles","name":"Credit Cards","postCount":89,"slug":"credit-cards","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

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Compare the best rewards credit cards here.

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In order to find the best cities for golfers to live in, we looked at data on factors relating to both golfing and livability. We looked at the density of golf courses and clubhouses, the number of rainy days and days with extreme temperatures, as well as unemployment rates, housing costs and income after housing costs. The idea was to find a city that someone could reasonably expect to have a job and decent disposable income, also with available golf courses and favorable playing weather. Read our data and methodology below to see where we got our data and how we put it together.

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Key Findings

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1. Portland, Oregon

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Portland, Oregon tops our list for the best cities for golfers to live in. Surprised? With 4.48 golf courses per 100,000 residents, Portland leads the way in access to golf courses. While access to golfing is important, Portland also has high scores in a number of other categories as well. PDX scores in the top 25 for property crime, days with extreme temperatures and income after housing. The one concern is that it rains pretty often in Portland. In fact, only one city in our list sees more rainy days than Portland, but at least that means the course will be green!

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2. Gilbert, Arizona

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Gilbert beats out the other three Arizona cities on this list to snag the second spot. The difference between the four cities is not large. They share the same access to golfing (150 golf courses) and similar weather patterns (an average of less than 16 rainy days a year). The biggest difference between them – and why Gilbert comes out on top – is income after housing and property crime rate. Gilbert’s median household income after housing is $68,729 and its property crime rate is 1,320 per 100,000. It ranks in the top 10 for both of those metrics.

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3. Chandler, Arizona

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Chandler is home to some of the highest-earning residents in the country and has plenty of access to great golf courses. According to Census Bureau data, there are 150 golf courses and country clubs in the Chandler area. So if you’re a golfer who values variety and loves to switch it up, this city may be a good fit for you. Chandler also has the 17th-lowest property crime rate in our study, a score which beats neighbors, Mesa and Scottsdale.

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4. Winston-Salem, North Carolina

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For golfers who want to stay on the East Coast, Winston-Salem is your best bet. Winston-Salem has 3.25 golf courses and country club per 100,000 residents, the 14th-most in our study. Of the courses in the area, Olde Homeplace Golf Club may be the best. It has a 93% recommendation rate on GolfAdvisor.com. While this city is great for golfing, it may be even better for livability. It has some of the lowest housing costs in the study. Our data shows that the median housing cost in Winston-Salem is only $788 per month, seventh-lowest of any city we looked at.

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5. Fort Wayne, Indiana

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It may be surprising to see Fort Wayne atop a list of the best places for golfers to live in, as it is not quite as famous as say, Arizona, for golfing. But Fort Wayne does have the third-highest density of golf courses in the country, with 3.8 per 100,000 residents. That means less time waiting to tee off and more opportunity to golf at your preferred tee time.

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Fort Wayne is also the cheapest city to live in our top 10. The median home costs $734 per month. The city would be a great candidate for golfers looking to raise a family: In the past we have found Fort Wayne ranks very highly for best cities to raise a family.

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Golfing here may be more seasonal hobby however, due to cold winters (although winters in Fort Wayne are nothing compared to, say, Anchorage). Data from NOAA shows that there are almost 80 days per year where the daily high is lower than 40 degrees Fahrenheit.

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6. Mesa, Arizona

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What do retirees like to do? Golf. Where are retirees moving? According to our research, Mesa, Arizona. Regardless if you are retiree age or not, Mesa is a great place for golfers to live. The city has the third-most golf courses per 100,000 residents in the study and it almost never rains. But if you are thinking about making golf a full-time hobby, make sure to rent a golf cart. Mesa has an average of 170 days per year where the daily high is above 90 degrees.

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7. Scottsdale, Arizona

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With 150 total golf courses and country clubs in the area or 3.6 golf courses per 100,000 residents, Scottsdale offers a great amount of variety and access to golf courses to golfers who live in the area. One reason why Scottsdale ranks so high is that it’s relatively affordable. The median household in Scottsdale has just over $60,000 left over after housing. With all that leftover cash maybe one day you’ll be able to save up enough for a trip to play at Pebble Beach!

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8. Lincoln, Nebraska

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Lincoln, Nebraska has a similar profile to Fort Wayne. Both cities score high on livability and access to golf courses. Census data shows while that there are only 11 golf courses in the area, after taking population into consideration, Lincoln actually ranks well in this factor. There are 3.59 golf courses and country clubs per 100,000 residents, which is only 0.01 less than the Arizona cities ranked above. Mahoney Golf Course, located right in the city, is a good option for golfers who don’t want to travel too far to get 18 holes in. The course record is 62 for men and 68 for women. With enough practice, maybe you’ll be able to top it.

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Golfing is great but you don’t want to break the bank doing it. That is where Lincoln shines. We have found that you can live comfortably in Lincoln without being a millionaire. The city’s median monthly cost is $877.

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9. Riverside, California

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It may be a surprise to see only Riverside representing California, given the state’s famously great weather. But while cities like San Diego, San Francisco and Los Angeles all do score well in our weather metrics, they do not score as well in our golf metrics. Riverside bridges those two concerns. Riverside ranks 10th in the study for least number of rainy days and has the second-highest concentration of golf courses.

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10. Boise, Idaho

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Our top 10 ends in Boise, Idaho, a city with plenty of offerings for potential golfers looking to live in the area. Boise comes with 2.53 golf courses and country clubs per 100,000 residents and low cost of living. For example, you would need to spend 50% less on housing in Boise than you would in Riverside. If you’re serious about your golf, that 50% you saved on housing can go toward a lot of extra tee time.

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Data and Methodology

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In order to find the best cities for golfers we looked at data on the 100 largest cities in the U.S. Specifically we looked at data for the following six factors:

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We ranked each city in each of the six factors, giving a double weight to golf and country clubs per 100,000 residents and a half weight to our two weather metrics: average days with rain and average days with extreme temperatures. We then found the average ranking for each city. Our final score was based off this ranking. The city with the highest average ranking received a 100, while the city with the lowest average received a 0.

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Questions about our study? Contact us at press@smartasset.com

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Photo credit: ©iStock.com/gradyreese

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\n","featuredImage":{"id":"cG9zdDoxOTAxNjQ=","databaseId":190164,"altText":"Who Are the Three Major Credit Bureaus?","date":"2023-03-11T02:02:08","fileSize":39093,"mimeType":"image/jpeg","modified":"2023-03-11T02:02:08","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2017/11/major-credit-bureaus.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-5-16","readable":"May 16, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/credit-cards/who-are-the-three-major-credit-bureaus","metaDesc":"Ever wondered where your credit report and credit score come from? They are created by the three major credit bureaus: Equifax, Experian and TransUnion.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"Who Are the Three Major Credit Bureaus? - SmartAsset","__typename":"PostTypeSEO"},"slug":"who-are-the-three-major-credit-bureaus","status":"publish","title":"Who Are the Three Major Credit Bureaus?","uri":"/credit-cards/who-are-the-three-major-credit-bureaus","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjozNg==","databaseId":36,"userId":36,"avatar":"$3c","description":"Liz Smith is a graduate of New York University and has been passionate about helping people make better financial decisions since her college days. Liz has been writing for SmartAsset for more than four years. Her areas of expertise include retirement, credit cards and savings. She also focuses on all money issues for millennials. Liz's articles have been featured across the web, including on AOL Finance, Business Insider and WNBC. The biggest personal finance mistake she sees people making: not contributing to retirement early in their careers.","additionalMeta":"$3d","email":null,"firstName":"Elizabeth","fullName":"Liz Smith","lastName":"Smith","name":"Liz Smith","postCount":"$3e","slug":"liz-smith","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo0NzIw","children":"$41","databaseId":4720,"categoryId":4720,"link":"https://smartasset.com/credit-cards/articles","name":"Credit Cards","postCount":89,"slug":"credit-cards","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

Ever wondered where your credit report and credit score come from? These crucial tools in the financial world don’t just spring up by themselves. They are created by credit bureaus, companies that collect, weigh and distribute your information. There are hundreds of credit bureaus in the U.S. However, it’s the three major credit bureaus that matter the most: Equifax, Experian and TransUnion. Proper credit planning can save you thousands of dollars when getting a large loan, such as for a house or car.

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Is it time to get a new credit card? Check out the best credit cards.

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What Is a Credit Bureau?

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Also known as a credit reporting agency, a credit bureau is a company that collects your personal and financial information. The bureau then sells that information to potential lenders, creditors, employers and landlords. This information is presented in the form of a credit score and credit report.

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These reports give a more concise picture of the potential risk a borrower, like yourself, may pose to a lender. Major credit bureaus have relationships with financial institutions like banks and credit card issuers who pass on their information and then buy it back.

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Credit reports combine a detailed history of your payment history, your experience with credit products and the details of your debts you’ve carried. They may also include public records, like tax liens, in your report. This information helps lenders decide whether they want to lend you money. It can also help determine how much you can borrow and your interest rates. Typically, the better your score, the better the rates.

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The three major credit bureaus are all publicly traded, for-profit companies. This means they are not government-run agencies. However, they are bound to follow the Fair Credit Reporting Act. This legislation provides rules and conditions as to how the bureaus can behave and handle the information they have. Let’s take a look at the three major credit bureaus below.

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1. Equifax

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Founded in the late 1890s, Equifax is the oldest of the three major credit bureaus. Today, Equifax operates in 24 countries, gathering, analyzing and distributing data on more than 820 million consumers. Its database also includes more than 91 million businesses around the world.

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The company now offers credit reporting, credit monitoring and identity theft and credit fraud protection to consumers. They’re the only of major three credit bureaus that report open and closed accounts in separate sections. Most others list all accounts alphabetically. This makes it easier to quickly identify how many debts you have and how much you owe.

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In September 2017, Equifax announced a major data breach that affected 145.5 million consumers in the U.S. The accessed information included consumers’ names, addresses, driver’s license numbers and Social Security numbers. If you’re unsure whether you were affected by the Equifax breach, you should check your credit report as soon as possible. That way, you can catch any fraudulent activity sooner rather than later.

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2. Experian

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Originally managing the western United States’ credit, Experian now operates on a global scale with clients in over 80 countries. The company promotes itself as one that helps both individuals and businesses thrive financially.

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In the U.S., Experian holds the personal and financial information of about 220 million consumers and 25 million businesses. The company specializes in customer insight, credit risk, market insight, fraud detection, debt management and more.

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3. TransUnion

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Originally created as the holding company for Union Tank Car Company in 1968, TransUnion quickly evolved into the credit bureau business a mere year later. The company then became the first credit bureau to use an automated tape-to-disc transfer of its information to speed up its processes. Today, TransUnion operates in 33 countries.

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TransUnion seeks to provide consumers and businesses with the necessary information to manage risk. This is done by providing data-tracking and analytics for businesses and credit reports, scores and monitoring for consumers. It has credit reports for more than 500 million people worldwide.

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The Differences Between the Major Credit Bureaus

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All credit bureaus collect and report on most of the same consumer information. This means your credit history, debt history and personal information. However, each of the three major credit bureaus works independently of one another. Each uses its own processes and algorithms to collect your information and create your credit report.

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Because these credit bureaus work independently of one another, lenders and creditors must report their information to each bureau separately. This results in slightly differing credit reports and credit scores from one bureau to the next. So when you request your credit report, you’ll want to take a look at all three of them.

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That way, you can compare and contrast and find any errors that may be dragging a credit score down. You can access each credit report for free once a year through AnnualCreditReport.com. You can also purchase a credit report directly from the credit bureaus whenever you need. It’s important to note that when you purchase your report from Experian, you receive the FICO® 8 Score.

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The Bottom Line

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It’s important to know who the three major credit bureaus are and how they are different. This helps you manage and analyze your own financial information like your credit report and credit score. That way, you can be more on top of catching errors, if any, or fraudulent activity. Staying on top of these things can snag you a better mortgage rate or one of the best rewards credit cards.

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Tips for Staying on Top of Your Credit

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Your credit limit is based on various factors, including creditworthiness, income, credit history and other financial obligations. Understanding these factors can help you maintain a healthy credit score and avoid the pitfalls of overborrowing. Here’s what you need to know. A financial advisor can help you create a plan to maximize your finances and reach long-term […]

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A financial advisor can help you create a plan to maximize your finances and reach long-term goals.

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What Is a Credit Limit?

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A credit limit is the highest balance an individual can carry on their credit card or credit line without incurring penalties or declining transactions. It’s an integral part of the lender’s risk management strategy, ensuring that the borrower does not accumulate debt beyond their capacity to repay.

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Understanding your credit limit is important for maintaining financial health and creditworthiness. It directly affects your purchasing power and the utilization ratio — the percentage of available credit that has been used. A high utilization ratio can negatively impact credit scores, signaling to potential lenders that you might be overly reliant on credit and could struggle to manage debts. Conversely, a low utilization ratio suggests prudent financial management and may improve your chances of obtaining loans with favorable terms in the future.

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How a Credit Limit Works

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Credit Limit vs. Available Credit

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Your credit limit is the total amount a lender has agreed to lend, while available credit is the portion of the credit limit that remains unused.

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For example, if you have a credit limit of $5,000 and have made purchases totaling $1,000, your available credit would be $4,000.

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Keeping track of your available credit will help you manage your debt responsibly by keeping within your credit limit and therefore avoid overspending. Monitoring your available credit will also help maintain a low credit utilization ratio, which is a key factor in calculating your credit score.

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Factors That Help Determine Your Credit Limit

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Financial institutions consider a variety of factors when setting a credit limit. Each factor provides insight into the borrower’s financial stability and their ability to manage and repay debt. Here are seven important factors that an institution considers when determining what your credit limit should be:

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Credit score: Your credit score plays a significant role in determining your credit limit. Lenders use your credit score to assess your creditworthiness and determine the level of risk associated with lending to you. Generally, a higher credit score suggests responsible credit management and may result in a higher credit limit.

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Income: Your income level is another crucial factor. Lenders consider your income to assess your ability to repay borrowed funds. Higher-income levels may lead to higher credit limits, as they indicate a greater capacity to handle debt.

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Credit history: Your credit history reflects your past credit behavior, including your payment history, the length of your credit accounts, and your credit utilization ratio (the amount of credit you’re using compared to your total credit limit). A positive credit history with timely payments and low credit utilization can lead to a higher credit limit.

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Debt-to-income ratio (DTI): This ratio compares your monthly debt payments to your gross monthly income. Lenders use DTI to evaluate your overall debt load and financial health. A lower DTI generally indicates that you have more disposable income to handle additional credit, potentially resulting in a higher credit limit.

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Employment status and stability: Lenders may consider your employment status and stability when determining your credit limit. A stable job with a steady income can contribute to a higher credit limit, as it suggests a lower risk of default.

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Existing credit lines: The credit limits of your existing credit accounts can also influence your new credit limit. If you have several open credit accounts with high limits and a good repayment history, lenders may be more inclined to offer you a higher credit limit.

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Lender’s policies: Finally, each lender has its own underwriting criteria and policies for determining credit limits. These policies may consider industry trends, economic conditions and risk management strategies.

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Bottom Line

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A credit limit is set by lenders. It’s based on your creditworthiness, which plays a role in your personal finance management and future borrowing potential. Your credit limit is determined through a careful assessment of factors such as credit score, income, debt-to-income ratio and employment stability, and can be adjusted over time to reflect the borrower’s financial behavior and situation. Understanding the distinction between credit limit and available credit can help you avoid overspending and the negative repercussions that come with it.

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Tips for Financial Planning

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