What Do Credit Report Agencies Do?

Posted On February 15, 2023

Credit report agencies collect information from creditors and collection agencies, as well as from public records. They then sell that data to lenders who use it when they make decisions about extending credit, such as approving or denying loans and credit cards.

There are three main credit reporting agencies in the U.S. Those are Experian, Equifax and TransUnion. Each has its own unique credit reports and scores.

They collect information about you

Credit report agencies collect and store your personal information and financial data that you submit to them. They use that information to create credit reports that are used by lenders and creditors to decide whether to extend you credit or not.

These reports can also be used to make employment decisions. They include your name, Social Security number, and other identifying information about you. They might also include public records, like liens and bankruptcy filings.

This information helps lenders and other companies understand your risk of not paying back a loan or making payments on time. It also helps them calculate your credit score.

Most credit report agencies can only sell your personal information to other companies if you authorize them to do so. This is a requirement of the Fair Credit Reporting Act (FCRA).

Your credit report may contain several different types of information, such as identifying information, credit account information and public records. This information generally falls into one of five categories:

1. PII, including your full name, address, and social security number.

2. Credit account information: This includes the date you opened and closed accounts, your credit limit or loan amount, and account balances. It also includes your payment history and whether you’ve ever made late payments.

3. Public records: This section lists information on bankruptcies, tax liens and any monetary judgments you have received.

4. You have the right to dispute errors in your credit report and to have inaccurate or incomplete information removed from it.

5. CRAs have to follow the FCRA’s rules when they collect and share your personal information with other businesses, including credit card issuers, insurance companies, and employers.

6. CRAs have to verify that the information they share is accurate and current.

There are more than 400 credit reporting agencies in the United States, but the three biggest are Equifax, Experian and TransUnion. These three CRAs are the ones that most people think of when they hear the term “credit reporting agency.”

They create credit reports

Credit report agencies, or CRAs, maintain records of your financial activities and information about your credit history. They use this information to create your credit report and credit score. These reports are used by lenders to decide whether to give you a loan, what interest rate they will offer, and other financial decisions.

Your credit report includes information on your current and past loans and other types of lines of credit, such as revolving credit, credit cards, mortgages and auto loans. It also shows your payment history and certain other account information such as your credit limits, if you have one.

A credit report is a detailed record of your credit activity and current credit situation that you can view for free from the three major credit reporting agencies – Experian, Equifax, and TransUnion. It is a valuable resource that can help you make informed financial decisions and protect yourself from fraud.

CRAs gather this information from many sources, including banks, credit card companies and other businesses that extend credit to consumers. They also collect information from the public, such as court records and bankruptcy filings.

Lenders may buy your credit reports from CRAs, and use them to make lending decisions. When you apply for a credit card, loan or other type of credit, you must consent to the use of your credit report by the lender.

Most lenders use your credit report and credit score to determine your eligibility for a credit card, loan or other financial product. Your credit score is a number that indicates the likelihood you will pay your bills on time and meet the terms of your credit agreement.

Your credit score is based on your credit report, and is determined using one of two scoring models – the FICO(r) and VantageScore(r) models. Your credit score can be useful in making financial decisions, such as deciding on a loan or credit card, renting an apartment, buying insurance, or applying for employment.

You can check your credit report for free every year from all three credit report agencies. In addition, you can dispute inaccurate or incomplete information. However, this may temporarily lower your credit score, so it’s best to do this only when you have a good reason to.

They score your credit

Credit report agencies sell your credit information to businesses that use it when deciding whether to loan you money, give you credit, offer you insurance or rent you a home. They also help you find out if there are any mistakes on your credit report.

The Fair Credit Reporting Act (FCRA) requires them to provide you with a copy of your credit report for free when you ask. It also gives you the right to dispute any errors in your report.

Your credit report contains information about your loans, credit cards, mortgages and other credit accounts. It tells lenders what you’ve done with these accounts and how well you’ve managed them. The information in your report can make it easier for you to get loans or credit cards, but it can also make it harder.

In the United States, there are three main credit reporting agencies. They are Equifax, Experian and TransUnion, and they each gather and compile your credit history in different ways.

Each agency uses a credit scoring model to calculate your credit score. Your credit score is a number between 300 and 850 that’s based on your credit history. The most popular credit scores are the FICO score and VantageScore.

You can request a copy of your credit report for free from each of the major bureaus by visiting one of their websites or contacting them by phone or mail. Some companies, such as banks and mortgage lenders, require that you have a copy of your credit report before they will give you credit or extend you new loans.

There are many different credit score models and they vary a bit from bureau to bureau. Some of these models use a combination of the information in your credit reports to determine your credit score, and some are more based on specific data points.

For example, the FICO score model weighs payment history more than other credit factors. This includes the number of bills you have, how many payments are over 30 days late, and how recently you’ve missed a payment.

They give you access to your credit report

A credit report gives lenders, employers, insurance companies and other businesses a look at your financial history. It can help them decide whether to loan you money, give you credit or offer other services like insurance or rent you a home.

Your credit report is a summary of the information on your credit accounts, how you manage them and how much debt you have. Credit reporting agencies collect this information from your creditors and other sources, including public records.

The three major credit reporting agencies, Equifax, Experian and TransUnion, gather this data to create your credit report. You can get a copy of your credit report from each of them every 12 months for free under the Fair Credit Reporting Act (FCRA).

Beyond basic credit account information, many credit reporting agencies also receive payment data on other types of payments, such as cell phone bills and utility bills, which can make up part of your overall credit profile. Some newer credit reporting agencies have carved out a niche, developing credit reports for thin-file borrowers based on alternative data rather than just credit accounts.

Lenders and other consumer-facing organizations often consider credit information from alternative credit reporting agencies when deciding whether to provide you with credit, or when considering your application for employment or insurance. Some of these alternative credit reporting agencies also have a specialized focus on low-income and underbanked populations, collecting data about nonfinancial public records, such as tax liens and civil judgments.

In addition, you can request a free copy of your credit report from each of the three nationwide credit reporting agencies if you have been denied credit in the last 60 days or have been the victim of identity theft. You can also dispute inaccurate or incomplete information on your credit report. The federal government regulates credit bureaus and protects you from unfair, deceptive or fraudulent credit practices. It also requires that all credit bureaus provide you with one free credit report per year and lets you dispute any errors or fraud on your credit report. You can learn more about credit reporting laws at the Consumer Financial Protection Bureau’s website.