What Is A Credit Bureau?

A credit bureau is a storehouse for credit history information. There are over 1000 local and regional credit bureaus throughout the U.S. However, most credit bureaus are either owned or under contract to the nation's three major credit reporting agencies. These three credit bureaus, TransUnion, Equifax, and Experian, maintain enormous databases that contain credit histories on more than 200 million Americans. Over half a billion credit reports are generated each year, and billions more bits of information are managed and stored.

Credit bureaus play an integral role in the lending process. Though they don't lend money themselves, they provide the vital information that lenders base their decisions on.

Whenever a person applies for credit, a job, or even insurance, the potential lender requests a copy of that consumer's credit report. The credit bureau pulls the information it maintains on the individual, and assembles it into a report with a credit score. The report is an overview of the person's credit history, typically stretching 7 years or longer.

The credit bureau sells this information to the lender who then decides whether to grant the loan or not, based on the credit bureau's information.

Credit bureaus don't rate credit but they do offer credit scoring services. Each credit bureau uses a different scoring system - FICO, Vantage Score and others. However, it's the lender who ultimately decides how that information is interpreted. Credit bureaus don't approve or reject applications for credit, they merely act as a liaison between borrowers and lenders.

In theory all three credit reports should be virtually identical but in fact, there are often major differences between reports on the same individual. One of the reasons is that creditors and other information sources like department stores or utility companies don't always report to all 3 credit bureaus. They may only send a report to one of the credit bureaus. There is often incorrect or outdated information contained in one report that doesn't appear in others. For example, a credit bureau may confuse the name of one person with another and thus insert a report into the wrong credit file. Names, social security numbers, addresses, employers, and other personal information can be easily jumbled, leading to errors in credit reports. People with Jr. after their name, people with very common first and names like Sue Smith or Bob Brown, and women who have married and changed their name often run into problems.

That's why it's very important to periodically check your credit reports (many recommend that you check your credit report every 90 days). If you notice any variations, you should take a closer look for errors. It's your right to contest any errors that you believe were made in your credit report. Contact the credit bureau right away to start an investigation. The process is free.

Credit Reporting Bureau

A credit reporting bureau collects financial information about you and makes it available to you and other parties that request it. Authorized viewers include landlords, employers, banks, retail stores, auto dealers and financial services companies. For instance, an employer can request a copy of your credit history from a credit bureau before offering you job. Information the credit reporting bureau provides could make the difference.

It is important that you know precisely what information the credit bureau reports about you. You can find out when your check your credit report. You can request a copy of your free credit report by visiting our home page, or doing an Internet search. You have the legal right to see your report from all 3 credit bureaus once a year.

What Can A Credit Reporting Bureau Keep Track Of?

A credit bureau keeps extensive records on your financial history on its credit reports. A credit bureau may keep your information on file for up to seven years or more. Some of the information that credit bureaus track includes:

• Information about criminal convictions, bankruptcy, tax liens, and lawsuits against you.
   
• Personal information including social security number, addresses (past and present), employers (past and present), spouse, telephone numbers.
   
• Loans and account information dating back years. All open credit accounts, car loans, mortgages, home equity loans contain detailed information about your payments - whether they were on time or 30, 60, 120 or 180 days late. Any bills that went to collections agencies will also appear on your credit report.

As a precaution against identity theft, and to maintain robust financial health, check your credit report at least two times a year so that you can be certain that the information the credit bureau has about you is accurate.