Information on Credit Bureaus

A credit bureau is an agency that collects and sells information about an individuals creditworthiness. Their clients include mortgage lenders, credit card companies and banks. The information the credit bureau collects is used to screen potential clients for loans of all types and credit cards. The more you know about credit bureaus and their role when it comes to your credit, the better off you are.

Facts

The three major credit bureaus are Experian, TransUnion and Equifax. Even though there are three, the information they keep on their records is different. They also have their own credit score for individuals. The credit bureau will have many facts of an individuals personal information on the file: name, date of birth, Social Security number, current and previous addresses as well as employment history.

Significance

Whenever a person applies for a loan or any type of credit, his credit report is pulled from one of the three credit bureaus. If the credit history listed by the credit bureau is less than stellar, it can impact whether or not someone receives a loan, gets a job or even insurance. Furthermore, a poor credit report can result in a higher interest rate on a loan or a credit card.

Features

A variety of information gets reported to credit bureaus and ends up on your credit report. If you have a bank loan, the bank reports to the credit bureau if you are on time or delinquent. Lenders report this every 30 days. Information about your mortgage, car loan, student loan and even credit inquiries are listed on your credit report. Each credit bureau will show who made the inquiry and when. If there are too many inquiries in a certain period, it can affect your credit rating.

Terminology

There are terms that you should be aware of when dealing with credit bureaus. Charge-offs means accounts receivable that will likely remain uncollectible and will be written off. A secured loan is a loan in which you had to put up some collateral for the loan. An unsecured loan is a loan that didn't require collateral. Credit bureau risk score is a credit score based on data stored at the major credit bureaus. It provides a glance of a consumer's credit risk at a particular point in time. It also rates the likelihood that the consumer will repay debts as agreed.

Prevention/Solution

To ensure that the credit bureau has accurate information, you should order your credit report at least once a year from each of the credit bureaus. You can order the credit report online through annualcreditreport.com . If there is any incorrect information on your credit report, take the necessary steps to dispute the information. Annotate it on the credit report, make a copy for yourself and then return the report to the credit bureau so the agency can make the corrections and send you an updated report.

Identity Theft

If you have been the victim of identity theft, each credit bureau can place a fraud alert on your credit report upon request. When you have been a victim of identity theft, repairing and restoring your name in the credit arena can be a lengthy process. Placing a fraud alert on your credit report can prevent any further activity.