What is a credit bureau?
Have you ever applied for a loan and been accepted or went on a job interview and been denied because of a poor credit score? Have you then wondered who determines what your credit report says and how high or low your credit score is? The truth is that there are three credit bureaus in America that all work to calculate your credit score and keep up with how good or bad you are with managing debt.
Credit bureaus are in place to collect information on your ability to repay debt and dispense it to potential creditors, like credit card companies, and even future employers. They all work to keep track of your bill-paying tendencies and stay in business by properly predicting how you will act in the future when it comes to managing your money.
The three major credit bureaus
In America, there are currently three credit bureaus. They are Equifax, Experian and TransUnion. Each of them has been in business for many years and while some others have tried to enter the marketplace, these three are the most trusted and, therefore, are used most often by creditors. But there is also an advantage to have three credit bureaus. Rather than trust just one to reliably deliver your credit score, having three means that there is a system of checks and balances in place that allows consumers to get the truest possible score for themselves. It’s one reason most people check with all three major credit bureaus when they check their credit scores every year.
Why you need to contact the credit bureaus
In today’s economy, it’s important to keep an eye on your credit score at all times. As this video explains, credit card companies are changing the ways they handle some consumers and affecting credit scores across the board.
Video: The Credit Crunch Affects Everyone
Regulating the credit bureaus
Of course, the next obvious question when it comes to credit bureaus is: Who is regulating the credit bureaus and making sure they do their job properly? The three bureaus also have a lot of personal information, which is given to them without the permission of individual consumers. Because of this, the Federal Trade Commission, the government agency in charge of protecting consumers and watching over the economy, safeguards Americans by watching over the credit bureaus. They make sure the bureaus are doing their job and accurately dealing with the credit reports of individual consumers. They also make sure the information dispensed to credit bureaus and from credit bureaus is done safely.
Companies that report to the credit bureaus
There are many different companies that reach out to the credit bureaus to share information about you. Here are just a few of them:
Creditors and lenders: Credit card companies, banks and anyone who has ever given you a loan will keep in touch with the credit bureaus about how you’ve gone about paying back debt.
Utility companies: Think that paying your electric bill late doesn’t matter? It also gets tracked on a credit report.
Debt collection agencies: If you’ve been delinquent on a payment and refused to make it, it will be reported to the bureaus.
Public courts: Any ruling that comes out of court, such as filing for bankruptcy or missing child support payments, is displayed on your credit report after being reported to the credit bureaus.
Achieving a great credit score
The credit bureaus are in charge of keeping track of your credit score. But you are ultimately in charge of keeping your score high. Wondering how to do that? Watch this video to learn some tips about maximizing the credit score the bureaus keep on file for you.
Video: 7 Setps to a Higher Credit Score
Why you should contact a credit bureau soon
While credit bureaus may seem intimidating, the truth is that they are there to help you better understand how your financial situation affects your life. By law, Americans are entitled to one free credit report every year and consumers need to be able to contact credit bureaus to get these reports. Take advantage of the law and seize control of your finances again by reaching out to one of the three credit bureaus and seeing where you stand today.