3 Credit Reporting Agencies

There are many private credit bureaus which state they would offer credit reports. But beware. They could be scams. In the US there are only 3 credit bureaus which offer credit reports. These give a fair idea to the creditors whether they are taking the right decision while lending the money to the individuals.

What are credit reports and how does the credit score affect a person:

All the 3 credit bureaus Experion, Transunion and Equifax are actually helping the stakeholders i.e. the creditors in this case earn their bread and butter. These bureaus provide the credit report and also counsel you on what modifications you need to make. They also keep you posted 2 times a year on the status of your history and also caution you when you are about to exhaust your limit.

Your credit score which reflects on the credit report plays a very important role in your standard of living. One must understand that the reports generated by these credit bureaus may not tally with each other in all respects. The approach adopted by these credit bureaus may be similar in fashion. One would notice that the report generated by these 3 credit bureaus would more or less imply the same thing. A credit report includes the name of the borrower, his address and the name and address of his employee, place of work etc.

Information or data related to his past credit – whether he or she has any past pending loans or mortgages to be cleared – credit balance at the banks etc.

Pattern of payments – it gives an idea of your past payment pattern. How regular or irregular one has been with respect to settlement of monthly bills, loans etc.

Legal records – whether there are any cases of litigation or legal case proceedings in the court of law against you.

Your personal statements – It is mandatory for an individual that he provides a statement containing all the personal information.

Most information contained in the credit report should have error free information. One should ensure that you give attention to details in the credit report. Credit bureaus have good contacts with creditors and financiers. Since they are in the industry since a long time, it enables the credit bureaus to generate error free and accurate reports. Each credit bureau would have its set pattern relating to the past history of an individual’s credit pattern. Each credit bureau would generate reports based on the credit score of the individual.

Credit bureaus main source of income is the technology of credit scoring. The credit bureaus generate credit reports based on the individual’s credit score which enables the creditors to decide whether it is worth giving credit to an individual or whether the individual is credit worthy.

Calculation of credit scores: Credit bureaus use the FICO score to arrive at the credit score of an individual. Most of the creditors work in close association with credit bureaus to arrive at a decision. In case you are moving to a new residence and you need an electric connection, the electric company would first get in touch with the credit bureau to find out your creditworthiness.

Cell phones: While purchasing a cell phone also, the cell phone company would first confirm with the credit bureau regarding one’s creditworthiness.

Accessibility: Every individual has free accessibility to credit reports. Individuals can contact the credit bureaus and get their free credit report annually. You need to pay a fee to the credit bureau for getting your credit score.

It is also important that one checks the credit report for any errors or ambiguity. One needs to also ensure that the credit report is up-to-date, accurate and clean before applying for a loan.