Credit Bureaus

Credit bureaus collect information about a consumer’s financial affairs and they sell that information to businesses such as banks, insurance companies or other lenders. These credit bureaus charge the organizations an annual fee for this information, but they also charge consumers for a copy of their own credit report.

The 3 major credit bureaus in North America are Equifax, TransUnion, and Experian. Most companies check with all 3 credit bureaus before making decisions regarding a loan to an individual. These bureaus use statistics to create what is called a credit score and the higher the score, the better the credit.

Credit bureaus obtain their information in a few different ways:

• Consumer provided information – consumers who fill out credit applications
• Public Records – information on such items as bankruptcy and foreclosures
• Credit Companies and Collection Agencies – credit files are sent to the credit bureau every month

From this information they compare consumers using statistical analysis and report back this analysis to those requesting authorized information. A good credit history is very important when you apply for credit, insurance, employment or even leases. You can work with these credit bureaus to solve any problems or errors. They can help you to determine if you have been a victim of fraud or identity theft.

All credit bureaus are held to the Fair Credit Reporting Act (FCRA) and this ensures that complete information has been sent to businesses when they check a consumer’s credit. Under this act an individual has certain rights including the right to know anyone who received your credit report within the last 12 months. This ensures that only permitted companies are requesting your credit history. The reports provided to consumers by either of these credit bureaus will give detailed credit history, personal information and credit habits. You can use this to accurately see where you stand before requesting credit from a company.