Credit Advice

Loans from your 401k do not appear on your credit report

Have a question?

Do you have a question about consumer credit? You may find an immediate answer by using the search engine. If you can't find what you're looking for, please fill out the form, being as specific as possible.

Please note: The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future column.

Our policies
The information contained in this column if for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation.

Please understand that Experian policies change over time. Column responses reflect Experian policy at the time of writing. While maintained for your information, archived responses may not reflect current Experian policy.

Credit Advice

Loans from your 401k do not appear on your credit report

Dear Experian,

Can my portfolio/mutual funds/401k be added to my credit report, depicting net worth? Is there a section on the credit report that shows a person’s net worth? Can personal loans that I have taken from my 401k and paid back faithfully be added as positive information to my credit report?

- NTU

Dear NTU,

Credit reports only include information about debts. They do not include details about income, investments or assets. So, details about your investment portfolio, mutual funds or 401k cannot be added to your credit history.

You provide income to your lender when you complete your credit application. For large loans, like mortgages, you may be asked to document your income and assets. Those details, along with your credit history, help lenders determine your overall debt-to-income ratio, as well as your capacity to manage the new debt.

Loans from your 401k are not part of your credit report, either. Such loans are essentially loans to yourself from your retirement savings. They are not debts in the traditional sense, and there is no experience that indicates they are a good indicator of how you would manage a normal debt such as an installment loan or credit card. That is one reason they are not part of your credit report.

Equally important is that federal law has specific requirements for reporting a debt that probably could not be met by funds borrowed from your 401k. For instance, the entity reporting account information must update it regularly and must be able to respond to disputes from the consumer if there is any question about its accuracy.

Because you are “borrowing” your own money, a 401k loan would not be able to comply with the law. Additionally, the reporting entity must be a subscriber to Experian’s services so that we can ensure they meet our security requirements, reporting standards and verification procedures. That is a highly technical and very expensive proposition that would prohibit reporting just one loan or credit account

Thanks for asking.

- The "Ask Experian" team

  • © 2014 Experian Information Solutions, Inc. All rights reserved.