Credit reporting agencies are bureaus that collect financial and other identifying information about consumers. They are sometimes referred to as consumer reporting agencies. These agencies compile information about an individual's spending and payment habits as well as publicly recorded information into a document called a credit or consumer report. The agencies release the information within the file to creditors who have permission to view a consumer's report.
How Many Credit Reporting Agencies are There?
There are several credit reporting agencies, however there are three major credit bureaus. These bureaus are Equifax, Experian and Trans Union. When you apply for credit, your creditor will request a credit profile from one or more of these agencies to determine your credit worthiness. Depending on the information within your profile, the creditor will decide whether or not to extend credit to you.
What Kind of Information Do Credit Reporting Agencies Have About Me?
Each agency reports different types of information about a consumer. Credit reporting agencies report information such as name, date of birth, current and previous address information and employment history. Information that is a matter of public record is also included in your file such as bankruptcies, foreclosures, evictions and tax liens.
A record of your payment history with creditors such as your mortgage company or auto lien-holder are a major part of the information in your credit file. Creditors report your timely (or untimely) payments to the major credit bureaus. Credit reporting agencies document how well you meet financial obligations and pay your bills. If you are consistently late paying your credit obligations, the history will reflect negatively on your credit file.
How Do I Know If My Credit File Has Accurate Information?
The most effective way to determine if the information in your credit file is accurate is to request a copy of your credit report. Each major bureau has different information about you so it is best to order a copy of your report from all three major bureaus. The Fair Credit Reporting Act (FCRA) allows consumers to request a free copy of their credit report from each major bureau once every 12 months. You can order a free credit report on-line, by telephone or by mail.
Can I Have Inaccurate Account Information Removed From My File?
Yes. By law credit reporting agencies must remove inaccurate or outdated information from your credit file. If you find inaccurate or outdated information within your credit report, you must notify the credit bureau by filing a dispute. The agency then contacts the creditor that reported the information. The creditor has 30 days to validate that the information in your file is accurate. If the creditor does not respond within 30 days, the credit reporting agency must remove the information from your file.
How Do I Maintain a Good Credit Record?
Maintaining a good credit record takes work. The first step in keeping a good credit record is to ensure all information within your file is correct. Second, you must ensure that you pay all credit obligations on time and in good faith. Finally, be patient if your file contains negative information. Late payments, charge-off accounts and other negative information can only remain on your report for seven years. The older the negative information, the less impact it has on your ability to obtain credit in the future.
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