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Credit Bureaus Tutorial
There are 3 different types of credit bureaus
1) Equifax
2) TransUnion
3) Experian
They are sometimes referred to as Credit Reporting
Agencies (CRA's). These three credit bureaus are
not related. Each operate a separate for profit
business.
What they do?
Credit Bureaus are credit reporting agencies (CRA's) that collects, maintains and then sells information about your credit habits. That's how they make a profit. The credit file they maintain is called your credit report.
Here's a list of who can or do buy your credit information
- Yourself (the consumer). Once a year you can obtain free credit reports and then if you need another credit report you have to buy it. The only other way to get free credit reports are to be denied credit.
- Creditors or Merchants (After you apply for credit the creditor can request your credit file to check your credit history and the creditor pays for it).
- Insurance Companies (after you apply for insurance coverage they insurer will request a copy of your credit history and the insurance company have to pay for this service).
- Credit Card Companies ( after you apply for a credit card the credit card company will obtain a copy of your credit file and the credit card company pays for it).
- Lenders (When you apply to finance a home, car,or boat the lender can obtain a copy of your credit file and the lender pays for it)
- Employer (If you seek employment with a company they can get a copy of your credit file from one of the credit bureaus and the employer will be responsible for paying the credit bureau for the file.
Unlike yourself which can only pay per credit report, creditors, insurances, lenders, employers and credit card companies pay these credit bureaus by joining a membership with them. They pay a fee to the credit bureaus to obtain credit reports about you.
Here's a list of the kinds of information they can collect and sell
1) Your personal information including your name and address
2) Your employment history including the places you have worked in the past
3) Your payment history including who the creditor is, how much you borrowed, and
if you are paying back as promised.
4) Your Inquiries which shows who requested your credit information.
5) Your Public Records which shows information on whether you have filed for bankruptcies. It also shows foreclosures and liens such as tax liens.
How Do the Credit Bureaus Get Your Information?
The initially get your personal information they collect from you and where's how they get it. When you applied for credit, you must fill out a credit application. You must fill in information such as your name, birthday, address, social security number, employer and telephone numbers. Then you must sign saying its okay for the creditor to check your credit history.
The creditor then contacts the credit bureau (s) to see if you are credit worthy. In order to do that they must give the credit bureaus the information from the credit application and that's how the CRA's get your personal information. Then once you have established credit, your creditor or lender will report your payment history to the bureaus. The bureaus then put all of that information that your creditor supplied to them and add it to your credit file.
How do creditors get your credit file?
Credit bureaus can sell your credit information to businesses that have bought a memebership package from them. That's how they make a profit. Once a business is a member they can call the credit bureau that they are a member of and request a copy of your credit file if you apply for credit with them. If they are a member they can also report your credit history to the bureaus as well.
Hi, I'm Abbie.
Your financial
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