Highlights:
- The three nationwide credit bureaus do not make lending decisions
- Credit bureaus receive information from your lenders and creditors
- Regularly reviewing your credit reports is important to ensure your information is accurate and complete
The simplest answer is that credit bureaus, like Equifax, are data collectors. Credit bureaus, also known as credit reporting agencies, do two things:
1. We compile your credit history based on your credit accounts, using your Social Security number or other identification information.
2. We provide your credit information, in the form of credit reports, to lenders and creditors to help them determine your creditworthiness. We also provide credit reports to you, so you can better understand your credit situation.Your credit history, including factors such as your payment history and your amounts owed, are used along with other factors to calculate your credit scores.
Do the three nationwide credit bureaus make lending decisions?
A frequent misperception about the three nationwide credit bureaus (Equifax, Experian and TransUnion) is that they make lending decisions. Credit bureausprovide some of the information creditors and lenders use to help them make important lending decisions. While credit bureaus collect credit information in order to make it available to certain third parties, the decision to deny or approve someone credit ultimately lies with the lender or creditor. Each lender and creditor may have its own criteria.
Where do credit bureaus get their information?
Credit bureaus use different sources for collecting information, and not all third parties report to the three major credit bureaus. This means that each of your credit reports may contain different information. Creditors keep the credit bureaus updated with your account status and payment history — two factors that contribute to your credit scores.
Speaking of credit scores, there are many different credit scoring models used by credit bureaus and other entities. As a result, your credit score may vary between the three nationwide credit bureaus — even if all of your creditors report to all three. While many do, some creditors may report to only two, one or none at all.
What types of information are on credit reports?
Credit bureaus collect the following types of information:
- Credit account information, including payment history, balance of an account, when the account was opened, date of the last activity, high credit on the account and the credit limit on the account
- Debt collections
- Bankruptcies
It's important to note some companies may take these factors and others into consideration when evaluating your application for credit.
Why are each of the three nationwide credit bureaus required to provide you with a free copy of your credit report?
According to The Fair and Accurate Credit Transactions (FACT) Act, you have the right to one free credit report each year from each of the three nationwidecredit bureaus. You can get these free credit reportsby visiting www.annualcreditreport.com. You can also create a myEquifax account to get sixfree Equifax credit reports each year. In addition, you can click "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.
Credit bureaus are also required to provide an additional free credit report in the following instances:
- You’ve been denied credit or a benefit as a result of information on your credit report within the last 60 days
- You’re unemployed and seeking employment
- You're on public assistance
- You're a victim of identity theft
Why is it important to dispute inaccurate or incomplete information on your credit reports?
Regularly reviewing your credit reports is important for many reasons, including ensuring accuracy of your information. Information that is inaccurate or incomplete may not only impact your credit scores, but could be a sign of potential identity theft.
If you do find information on your credit reports you believe is inaccurate or incomplete, and it is account-related, consider contacting the lender or creditor with whom the account is associated. In addition, you may file a dispute with the nationwide credit bureau that furnished the credit report where the information is listed. If you find information you believe is inaccurate or incomplete on one credit report, you may want to check credit reports from the other two bureaus. At Equifax, you can create a myEquifax account to file your dispute. Visit our dispute page to learn other ways you can submit a dispute.
FAQs
The simplest answer is that credit bureaus, like Equifax, are data collectors. Credit bureaus, also known as credit reporting agencies, do two things: 1. We compile your credit history based on your credit accounts, using your Social Security number or other identification information.
What is meant by credit bureau? ›
Credit reporting companies, also known as credit bureaus or consumer reporting agencies, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company.
What is a credit bureau Quizlet? ›
Credit Bureau. An agency which collects the credit history of consumers so that creditors can make decisions about granting loans. Credit Score. A calculated score that measures an individual's creditworthiness; the two main types of credit scores are the FICO score and the VantageScore. Credit Report.
What are the three main credit bureaus responses? ›
How to get a copy of your credit report. By law, you can get a free credit report each year from the three credit reporting agencies (CRAs). These agencies include Equifax, Experian, and TransUnion.
What do you say to the credit bureau? ›
Explain in writing what you think is wrong, include the credit bureau's dispute form (if they have one), copies of documents that support your dispute, and keep records of everything you send.
What can credit bureau do to you? ›
A credit bureau, also known in the U.S. as a credit reporting agency, is an organization that collects and researches individual credit information and sells it to creditors for a fee, so they can make decisions about extending credit or granting loans.
What does a credit bureau check do? ›
Your credit reports are important pieces of financial information that help lenders measure your level of credit risk, or the likelihood you'll pay your bills on time.
What are the credit bureaus called? ›
There are three big nationwide providers of consumer reports: Equifax, TransUnion, and Experian. Their reports contain information about your payment history, how much credit you have and use, and other inquiries and information.
What credit bureau is mainly used? ›
Experian, Equifax and TransUnion are all respected, credible bureaus that are used widely.
Which of the following is a credit bureau? ›
There are three main credit bureaus: Experian, Equifax and TransUnion. Below, CNBC Select reviews common questions about the credit bureaus so you can be more informed when applying for a new card.
Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving a loan.
Can the credit bureau give out your information? ›
Under the law, credit bureaus and other CRAs can release your information only to those third parties that have certified that they have a purpose permitted by the law to obtain your consumer report, such as to evaluate your application for credit, insurance, or employment, or to rent you an apartment.
Which is the best definition of credit? ›
Credit is the ability of the consumer to acquire goods or services prior to payment with the faith that the payment will be made in the future. In most cases, there is a charge for borrowing, and these come in the form of fees and/or interest.
What is the 609 loophole? ›
A 609 Dispute Letter is often billed as a credit repair secret or legal loophole that forces the credit reporting agencies to remove certain negative information from your credit reports.
How do I fix my credit bureau? ›
How to improve your credit score
- No more debt. The first step to fixing your credit record is to not make any more debt for the time being until your credit record has improved. ...
- Review your credit report. ...
- Make payments on time. ...
- Keep old accounts open.
A business uses a 623 credit dispute letter when all other attempts to remove dispute information have failed. It refers to Section 623 of the Fair Credit Reporting Act and contacts the data furnisher to prove that a debt belongs to the company.
What is the difference between a credit score and a credit bureau? ›
Your credit report is the underlying personal and account information that a credit bureau organizes into a report. A credit score is a three-digit number credit scoring companies calculate based on an analysis of information in one of your credit reports.
How do I know if I am on the credit bureau? ›
How do I get my free credit report?
- Visit www.mycreditcheck.co.za.
- Register and submit your verification documents ( Id and Proof of residence not older than 3 months)
- If you are need more information, you can also chat with Ed our chatbot.
If you are unable to pay off debts, your name will be flagged by the credit bureau, and added to a blacklist; and it will be more difficult for you to get loans in the future. The simplest way to clear your name from the credit bureau is to pay off the debt.
How do credit bureaus get your information? ›
A: Credit bureaus get information from your creditors, such as a bank, credit card issuer, or auto finance company. They also get information about you from public records, such as property or court records.
