All of us have a Report on Credit History or Rating.
Your report on credit history is collated in reports made by the credit bureaus and provided to landlords, and utility companies at their request. When you apply for a credit card, mortgage, or other loan, the fine print on the application gives the lenders permission to check your credit history. The lenders usually requests a credit report from one of the “Big Three” credit bureaus. In theory, the credit bureaus merely report the raw data of your credit history and don’t assign you any kind of “credit rating.”
In reality though, credit companies do provide a credit rating in the form of a credit score. The lenders looks at your credit score and decides whether to grant you the credit you are requesting. Of course, lenders also look at your total outstanding debts, your minimum monthly payments, even your credit limits to see how far into debt you could go if you max out your existing accounts. Primarily, though, they are concerned with your record of delinquencies, accounts paid unsatisfactorily, and anything else that suggests how much of a credit risk you might be, all of which is used to calculate your credit score.
You may be surprised to know that part of what figures into your credit rating is a lack of credit history. If you have no credit history, you have no track record of payment and your rating is very low. Believe it or not, you’re a bit of a credit risk.
Three Big Filing Cabinets—The Credit Bureaus
Most people think that credit bureaus are branches of the government. In actuality, credit bureaus are for-profit corporations that provide a service: storing and maintaining credit records. The three major credit bureaus, or Credit Reporting Agencies, (CRAs) are:
�� Experian (formally TRW);
�� Equifax; and
�� TransUnion.
There also are local credit bureaus and reporting agencies, although their databases are not as extensive as those of the “Big Three.” The local credit bureaus are, however, worth noting because they are used by some who may judge your credit worthiness. An example of a local credit agency is a Residential Mortgage Credit Reporting (RMCR) firm that provides a bureau-merged credit report. In addition, all of the “Big Three” send your disputes to what are known as “third party databases”, to determine their validity.
To report information to the credit bureaus, creditors must fill out an application and pay a fee to each bureau to which they wish to belong. Membership is completely voluntary. No creditor has to report anything to any bureau. The more “thrifty” creditors may expend the time, trouble, and money to report to only one credit bureau. Given the fact that each bureau has its own separate, private database and, because the credit bureaus generally don’t pass information back and forth to each other, you actually may have up to three divergent credit histories.
So who subscribes to the credit bureaus for their services? Banks, finance companies, department stores, taxing authorities, landlords, and other “credit grantors” all subscribe to the CRAs. Once a creditor subscribes to a CRA’s services, the creditor is allowed to report information on your account history. This information is stored by the CRA in a national database, and contains the following:
�� Your payment history;
�� Where you work and your employment history;
�� Your age;
�� Whether or not you’ve been divorced;
�� Your address history; and
�� In some cases, your salary.
Credit bureaus also search public records for:
�� Bankruptcy information from the federal government; and
�� Judgment and tax lien information from courts (district, circuit, justice, municipal, superior, magistrate, probate, and state), town clerks, and registers of deeds.
Who Regulates the Credit Reporting Agencies (CRAs)?
CRAs are governed by the U.S. Fair Credit Reporting Act (FCRA) of 1971. The FCRA was amended in 1997, and again in December 2003, and includes protections for consumers by increasing the responsibility of credit bureaus to investigate consumer disputes. The Federal Trade Commission, an organization responsible for enforcing federal credit laws, also governs credit bureaus.
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Your report on credit history is collated in reports made by the credit bureaus and provided to landlords, and utility companies at their request. When you apply for a credit card, mortgage, or other loan, the fine print on the application gives the lenders permission to check your credit history. The lenders usually requests a credit report from one of the “Big Three” credit bureaus. In theory, the credit bureaus merely report the raw data of your credit history and don’t assign you any kind of “credit rating.”
In reality though, credit companies do provide a credit rating in the form of a credit score. The lenders looks at your credit score and decides whether to grant you the credit you are requesting. Of course, lenders also look at your total outstanding debts, your minimum monthly payments, even your credit limits to see how far into debt you could go if you max out your existing accounts. Primarily, though, they are concerned with your record of delinquencies, accounts paid unsatisfactorily, and anything else that suggests how much of a credit risk you might be, all of which is used to calculate your credit score.
You may be surprised to know that part of what figures into your credit rating is a lack of credit history. If you have no credit history, you have no track record of payment and your rating is very low. Believe it or not, you’re a bit of a credit risk.
Three Big Filing Cabinets—The Credit Bureaus
Most people think that credit bureaus are branches of the government. In actuality, credit bureaus are for-profit corporations that provide a service: storing and maintaining credit records. The three major credit bureaus, or Credit Reporting Agencies, (CRAs) are:
�� Experian (formally TRW);
�� Equifax; and
�� TransUnion.
To report information to the credit bureaus, creditors must fill out an application and pay a fee to each bureau to which they wish to belong. Membership is completely voluntary. No creditor has to report anything to any bureau. The more “thrifty” creditors may expend the time, trouble, and money to report to only one credit bureau. Given the fact that each bureau has its own separate, private database and, because the credit bureaus generally don’t pass information back and forth to each other, you actually may have up to three divergent credit histories.
So who subscribes to the credit bureaus for their services? Banks, finance companies, department stores, taxing authorities, landlords, and other “credit grantors” all subscribe to the CRAs. Once a creditor subscribes to a CRA’s services, the creditor is allowed to report information on your account history. This information is stored by the CRA in a national database, and contains the following:
�� Your payment history;
�� Where you work and your employment history;
�� Your age;
�� Whether or not you’ve been divorced;
�� Your address history; and
�� In some cases, your salary.
Credit bureaus also search public records for:
�� Bankruptcy information from the federal government; and
�� Judgment and tax lien information from courts (district, circuit, justice, municipal, superior, magistrate, probate, and state), town clerks, and registers of deeds.
Who Regulates the Credit Reporting Agencies (CRAs)?
CRAs are governed by the U.S. Fair Credit Reporting Act (FCRA) of 1971. The FCRA was amended in 1997, and again in December 2003, and includes protections for consumers by increasing the responsibility of credit bureaus to investigate consumer disputes. The Federal Trade Commission, an organization responsible for enforcing federal credit laws, also governs credit bureaus.
For The User
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
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