Wednesday, January 15, 2014

What are Credit Reporting Agencies?

Credit reporting agencies are companies that collect information from various sources about an individual's lending and repayment history. This information is then used by lenders and other creditors to make underwriting decisions. In the United States, the terms "credit reporting agencies" and "credit bureaus" are often used interchangeably.

Credit Reporting Agencies: The Big Three

Most people who have dealt with credit reporting agencies, or credit bureaus, are familiar with The Big Three: Equifax, Experian, and TransUnion. These three are the nation's largest consumer data collectors, and just about every lender in the United States will use one of these three. However, there are smaller agencies, generally used for specific industries or for commercial use. The Big Three are private, for-profit companies, so they are not affiliated with the government. One of the ways they make money is by selling your name and address to credit card and insurance companies. That is why you will receive pre-approval letters in the mail. You can put a stop to receiving many of those by opting out. Contact one of the three bureaus for the number, or request a form that will opt you out permanently.

Credit Reporting Agencies: Alternative Credit Bureaus

There are also a few alternative credit bureaus in the United States. These bureaus collect data on non-financial debt payment information such as your rent, utilities, cable, or phone. These payments are not typically reflected on your Big Three credit reports. Payment Reporting Builds Credit, Inc. (PRBC) is the leading company in this field, and enables customers to self-enroll and build a positive credit report by reporting on-time payments for alternative bills. Although employers, lenders, and landlords do not pull from PRBC, you can request a file be sent to them to show good history for those alternative payments that are not reported to The Big Three.

Credit Reporting Agencies: Business and Commercial Bureaus

The Big Three are for consumers, and there is not much reported to them about businesses unless the business is a sole proprietorship using the individual's social security number rather than an employer identification number. However, for commercial businesses, there are commercial bureaus which gather information on the business. One of the most popular commercial bureau's is Dun & Bradstreet. Dun and Bradstreet collects information on businesses that can be used for lending purposes, business-to-business marketing, and supply chain management. The downside to this bureau is that charges businesses to improve their ratings, and as a result has had several lawsuits filed against them by those who refused to pay in order to improve their rating. Still, the company maintains information on more than 220 million companies worldwide.

For more information on how to pull your credit report from one of the big three credit reporting agencies, visit today.

Monday, January 13, 2014

Why You Should Check Your Credit Report Three Agencies

When it comes to creating a credit report, three agencies collect data on your borrowing history.  Credit card companies and other lenders may report to a specific agency or may report to all three agencies, but the data that is reported to any of them will eventually be aggregated in most cases and you will have a complete and comprehensive report with each of the three different credit bureaus in the United States. 

While your reports should be accurate and each of the three agencies should have basically the same information on your credit history, your scores from the three agencies may be different. Further, there are situations where a mistake may be made on one report but not all of them. As such, it is important to regularly obtain a credit report three agencies so that you will be aware of what each of the credit bureaus is saying about you.

A Credit Report Three Agencies Lets You Spot Mistakes

Sometimes, one credit reporting agency will make an error when compiling your credit report. For example, the agency may confuse you with another borrower who happens to have the same name as you. This mistake may be made by just one of the three credit reporting agencies and not the others. If this happens and you only check your report from one credit bureau, you may never see the error and won’t know to correct it.   This could adversely impact your ability to borrow money.

You Don’t Know Which Credit Reporting Agency Your Lender Will Use

You should get a credit report three agencies because you may not know which credit reporting bureau your lender will use when you apply for credit. You need to be aware of what your lender is going to see when you apply for credit so if there is a mistake or a problem you can fix it.  The credit bureaus may also have different credit scores for you, so you need to know what your score is that will be seen by the particular lender you are seeking a loan from.  If your credit score is lower with one of the credit bureaus, you should try to find out what is causing the score to be lower and can take steps to try to improve your credit so you get a more favorable interest rate.

Get a Full Picture Of Your Finances With a Credit Report Three Agencies

Since there are three different credit bureaus out there collecting information on you, getting a credit report three agencies just makes sense. Your credit report and score have such a profound impact on your finances and ability to borrow money, it only makes sense to stay informed.   Fortunately, it is easy to get a credit report three agencies from services like IDENTITY GUARD® so visit Credit Report 123 today to learn more.

Thursday, January 9, 2014

What is the Function of a Credit Reporting Bureau?

A credit reporting bureau has a very important job in the United States. These bureaus collect financial information about consumers. The information is stored and compiled into a report, which is presented to lenders who are considering allowing that individual to borrow money. The credit bureaus also use the information they collect about each consumer to assign him a credit score. This credit score has a profound impact on whether a lender will allow a debtor to borrow money, and at what interest rate.
Credit Reporting Bureaus Collect Data

Credit reporting bureaus collect data about almost everything that you do with your debts and your credit. For example, credit reporting bureaus have information about all accounts that you have opened, as well as accounts that have been recently closed. Lenders including car financing companies; mortgage providers; banks that issue personal loans; and credit card companies all provide information to the credit reporting bureaus. This information includes details like the available credit limit you have, the age of your accounts, how much new credit you have recently applied for and whether you have paid your bills on time or not. All this data, together, paints a very detailed picture of how responsible you have been with borrowing money over your life.

Credit Reporting Bureaus Give you a Score

Once the data on your borrowing behavior is collected, credit reporting bureaus use proprietary formulas to determine what your credit score is. While each of the three major credit bureaus in the U.S. may have slightly different proprietary formulas, the basic factors that the bureaus look at in determining your score are largely the same. To determine a credit score, the credit bureaus look at whether you have always been on time with payments; whether you are using 30 percent or less of your credit; whether you have a long history of responsible borrowing; whether you have a mix of different kinds of debt; and whether you have avoided applying for too much new debt in a short period of time. If the answers to all of these questions is yes, you likely have a good credit score.  

Checking Your Credit Report and Score

While credit reporting bureaus have an important job and usually do it well, mistakes can be made. It is important to check your own score and report with the credit reporting bureau to make sure the information on your report belongs there. A service such as IDENTITY GUARD® can make it possible to check your report and score so you can see how your score measures up. Visit Credit Report 123 today to learn more.