A Definition Of Credit Bureau Reports

A credit bureau is a company that compiles information based on your credit history and bill payment habits. Lenders use this service to access information to determine your risk factor. They also use it to determine what interest rates they should charge you. Potential employers, or landlords can access it to see how fiscally responsible you are.

How Do They Gather Their Information?

Credit bureaus use data furnishers, such as the courts, lenders, utilities, and debt collection agencies with which they have a relationship, to collate this information about you. This information is used to come up with your credit assessment, and credit score. Consumers are entitled to one free credit report per year from the three major nationwide companies, TransUnion, Experian, and Equifax. It is recommended that everyone get their free copy annually to check the details contained in their personal report, which can often be wrong.

Who Supervises These Companies?

The FTC, Federal Trade Commission, supervises these companies, and the companies that provide them with the information. Even though the big three companies are for-profit, they have established a trade organization, the CIDA, Consumer Data Industry Association, in order to establish industry standards, and to give them more weight when they lobby in Washington. There are many other companies that compile credit information about people, but these three are the only nationwide companies, and the only ones who legally have to provide citizens with free credit reports annually.

The PRBC, Payment Reporting Builds Credit Inc, allows consumers to enrol and report when payments have been made on time in order to build a positive credit score. On-time payments are often not automatically reported to the big three, and this can be useful for people who wish to maintain a positive credit score by making sure that all the positive payment history is maintained accurately.

There are credit reports available for businesses as well that can be used to determine the likelihood of the business being able to pay their bills on time. The three commercial credit report businesses are Dun & Bradstreet, Experian business, and Equifax Small Business Financial Exchange (SBFE).

Whether you are an individual, a small business, or a large one, it is valuable checking that the details on your credit report are correct, and if there are negative factors that are pulling your credit score down.