Everyone knows how important good credit is in today’s society. It has become the benchmark for just about every aspect of our lives. Want to buy a new home? Got to have good credit. Want better insurance premiums? Got to have good credit. How about that dream job? Hope you have good credit. Even renting an apartment could depend on the condition of your credit.
However, many people are still in the dark when it comes to finding, checking and maintaining their credit reports and credit score. This stems from a lack of knowledge regarding credit reporting agencies, also referred to as consumer credit reporting agencies and credit bureaus, and what it is they do.
What Does A Credit Bureau Do?
A credit bureau gathers and compiles details and information regarding your credit history. Banks and other lending institutions use the reports to see if your will be a risk to lend to and if so, how much of a risk. The major credit bureaus are not owned by the government and are all for-profit. They have a reporting relationship with credit card companies, banks and other financial and lending organizations which enable them to gather your financial information and format it into what we know as a credit report.
The History of Credit Bureaus
Credit reporting in itself actually began back in the 1860s when local merchants started maintaining a list of people that were poor credit risks. They would then share this list with the other merchants in the area. This worked very well on a local level but with the mass transit systems starting up, automobiles and trains, the need for this type of reporting grew from a local need to a national need. In 1899, Retail Credit Company, now Equifax, was founded to meet this expanded need, thus making Equifax the oldest reporting agency out of the major three.
What Are the Names of The Three Major Credit Bureaus?
While there are many, there are only three main reporting agencies that seem to be used nationally when creditors want a traditional credit report. They are TransUnion, Equifax, and Experian.
What Does Equifax Do?
Equifax Inc. is the oldest and one of the largest consumer credit reporting agencies in the U.S. They currently maintain financial information on more than 800 million consumers and 88 million businesses globally.
What is A Good Credit Bureau to Use in the USA?
As with anything, consumers want to get the best product they can afford before making a purchase, the same is true for our credit reports. However, trying to determine with credit bureau is better than the others is practically impossible. All three bureaus, Experian, Equifax, and Transunion are important for you to monitor since they are the three most preferred credit reporting agencies in the nation.
Why Are There Only Three Credit Bureaus?
Experian, Equifax, and Transunion are the largest credit bureau companies in the nation and have the most influence. However, there are dozens of smaller credit reporting agencies in U.S. that handle specialty credit reporting for various markets.
What Credit Bureau Is Used The Most?
While many consumers have asked which credit reporting agency is the most widely used, the question is not easy to answer. With the three major reporting agencies being used extensively, it is also tough to determine which reporting agencies a specific lender will use. Lenders pull reports from agencies based on their own criteria.
What Is A Credit Bureau Report?
A credit bureau report, commonly referred to as simply a credit report, contains information that covers not only your current debts but also debts from your past. This information is kept on your report for an extended period of time. Positive and administrative information, such as your address and a strong payment history, can remain on your report indefinitely. However, troubling information remains on your credit report for around seven years. Some different items have different time frames in which they can stay on your report.
- Chapter 7 Bankruptcy = Ten years from filing date.
- Chapter 13 Bankruptcy = Seven years for records marked “Included in BK”.
- Charge-Offs = Accounts paid late, seven years. Accounts paid on time, no time limit.
- Judgments = If paid, seven years from filing date. If unpaid, longer time limits may apply.
- Late Payments = Seven years from late payment date.
- Collection Accounts = Seven years from last payment date on the original account.
- Tax Liens = 15+ years if unpaid. If paid, seven years from lien payment date.
- Inquiries = Two years.
What is The Most Important Information Credit Bureaus Gather?
While the credit bureaus collect a lot of information about your financial activities, there are five main factors regarding your credit report that is used to determine your creditworthiness when you are looking for a loan or line of credit:
- How long you have had credit.
- The number of hard inquiries regarding your credit.
- Your payment history.
- The total amount of your current debt.
- The types of accounts you have on your credit report.
These five factors are typically what a lender will look at before they give you your desired loan or line of credit. If these factors represent your credit history poorly, the chances of you getting approval for the loan are pretty slim. However, if these factors represent you in a positive way, lenders will use this information to determine what interest rate will be applied to your loan or line of credit.
What Companies Report to Credit Bureaus?
Various companies report to the credit bureaus. Lenders, credit card companies and any other organization that extends lines of credit or loans either directly or indirectly. Even utility companies report to the credit bureaus. However, they typically only report when your payments have gone into collection.
Do The Three Separate Reports Match?
Your credit report will most likely vary between the three major credit reporting agencies. This is due to the agencies operating independently and not communicating and sharing information with each other. So when you check your credit report, it is highly advised that you check all three. This will give you a better picture of your credit, what’s affecting it, and where to begin correcting errors if any are found.
If you do find an error on any of the reports, you will want to dispute the error so that it is removed from your credit report. Keep in mind that if the same error has repeated itself on other reports, you will have to file a dispute with each bureau that has the erroneous information reported. You can file disputes either via mail or by visiting the reporting agencies website. For more information on filing disputes, click here.
How Do You Get A Free Credit Report From the Three Major Bureaus?
You are entitled one free copy of your credit report from each of the major bureaus once every twelve months as per federal law. If you need more credit reports before the twelve month period is up, you can purchase new reports from each of the credit bureaus. To get your free annual credit report, visit AnnualCreditReport.com. If your request for your credit reports is denied, contact the agency directly to try and resolve the issue. The agency should be able to explain the reason for the denial and how to proceed from there.
How Do I check the Three Major Bureaus After I Use My Free Report?
If you have used the free credit report provided by AnnualCreditReport.com and want to see the latest status of your credit reports, which is recommended you do no less than once every three months, you will have to contact the bureaus and request an updated copy. However, keep in mind that the bureaus charge a fee for your credit report. Here are the fees for each bureau.
- Experian = $19.95 for a credit report and FICO score.
- Equifax = $15.95 for a credit report and FICO score.
- Transunion = $9.95 for a credit report.
What Are The Different Types of Credit Reports?
Experian.com offers two types of credit reports, single credit reports, and 3-in-1 credit reports. The only real difference is that the single credit report shows your report from one bureau, Experian. A 3-in-1 credit report gives you your credit report from all three of the major credit bureaus.
What’s The Difference Between A Credit Score and A Credit Report?
Now that we covered credit reports, we can now dip into the matter of credit scores. While many confuse the two as being one in the same, they are actually quite different. Your credit report is a record of your financial history and activity. Your credit score, which is derived from your credit report, is a three-digit number that serves as a representation how creditworthy you are. Since the three major reporting agencies do not communicate and share their information about your history, each agency will typically have a different credit score for you. However, lenders have their own credit scoring formulas and these formulas will differentiate between lenders. FICO scores are an example of one of the varying formulas lenders can use.
Who Reports Your Credit Score?
Unlike the entries on your credit report, lenders do not report your credit score. Your credit score is derived from the information that is on your credit report. The credit bureaus generate a three-digit number that serves as a representation of your creditworthiness. The higher the number the better you appear to lenders.
Keeping a watchful eye on your credit scores is a great way to see how well you are doing when you are getting ready to apply for a loan or mortgage. Changes that cause your score to increase means your credit history is favorable to lenders. A decrease in your score makes you less appealing to lenders and could indicate possible identity theft.
How to Contact The Three Credit Bureaus
In the event you find errors in any of your credit reports, you will need to contact the credit bureaus directly. Here is the contact information for the three largest credit bureaus Experian, Equifax, and Transunion. Clicking on the agencies name will take you directly to their website.
- Telephone: 800-509-8495: Dispute Credit Report Items
- 888-397-3742: Report Requests & Fraud Help
- 877-284-7942: Existing Customer Support
- 888-243-6951: Business Credit Services
- 972-390-4908: Fax Line
- Mailing Address: Experian National Consumer Assistance Center
- P.O. Box 4500, Allen, TX 75013
- Experian Website
- Telephone: 866-349-5186: Dispute Credit Report Items
- 800-685-1111: Request Free Credit Report
- 888-766-0008: Place Fraud Alert on Profile
- 866-493-9788: Existing Customer Support
- 888-202-4025: Business Solutions
- 404-885-8078: Fax Number
- Mailing Address: Equifax Credit Information Services, LLC
- P.O. Box 740241, Atlanta, GA 30374
- Equifax Website
- Telephone: 800-916-8800: Disputes Items & Status Checks
- 877-322-8228: Free Annual Credit Report
- 800-888-4213: Purchase Credit Report
- 888-909-8872: Place a Security Freeze
- 800-493-2392: Credit Monitoring Customer Support
- 866-922-2100: Business Services Assistance
- 610-546-4771: Fax Machine
- Mailing Address: TransUnion Consumer Relations
- P.O. Box 2000, Chester, PA 19016-2000
- Transunion Website
We hope that you have found this information helpful in having a better understanding of what the credit reporting agencies are, what they do, and how they operate. With a firm grasp of this knowledge, you can better understand your credit reports and what actions to take to make any needed corrections.
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