The three major credit bureaus

Credit reporting agencies are often referred to as credit bureaus. While there are several different reporting agencies set up, there are three major credit bureaus that collect, compile and share your financial information. These three major credit bureaus are:

1. Experian: 1-888-397-3742, www.experian.com.
2. Equifax: 1-800-685-1111, www.equifax.com.
3. TransUnion: 1-800-916-8800, www.transunion.com.

Each of these three major credit bureaus gets information from your creditors. Most of the time, specific creditors have certain agencies that they prefer to report to. They may report to only one of the three (and eventually the three share information with each other), or they may report to all of them. But the three major credit bureaus get their information from someone else.

In addition to receiving the information, the bureaus compile it into your credit profile – your credit history. Each of the bureaus also assigns a number to your credit history. This number, depending on the system used, can range between 350 and 950. The higher the number, the better your credit is. Here is the kind of information that credit reporting agencies collect when building your credit history:

• Your identity.
• Employment information.
• Address history.
• Types of loans you have, and who issued them to you (this includes credit cards).
• Payment history.
• Available balance.
• Highest balance.
• Public records information.
• Other information related to your finances.

When the credit bureaus have compiled this information, they often sell it. Retailers, banks, finance companies, insurance companies and others are willing to pay to see whether you qualify for certain programs. These can be marketing programs aimed at getting your business. In other cases, the people that buy access to your credit report are those trying to decide whether to extend you credit, offer you a job or provide you with a lower insurance premium.

Looking at your own credit report

The credit bureaus also provide individuals with information about their credit histories. Indeed, it is possible (and advisable) for you to check your credit report regularly. By law (the Fair Credit Reporting Act), the information in your credit history has to be accurate and up-to-date. You can check your credit report periodically to make sure that everything is as it should be.

You are actually entitled to one free credit report from each of the three major bureaus once a year. This means that you can get three free credit reports every year. Additionally, if you want more than one credit report each you (and you should), you can pay a reasonable fee to access your report more times. Another time you have the right to a free credit report is when you are denied credit. The company that denied your application has to provide you with the name and address of the agency that provided the information to them. This way you can check your credit report for any problems.

If you find a mistake on your credit report, you should notify the three major credit bureaus. They are required by law to investigate if you dispute anything in your report, and fix the mistake if it is a legitimate concern. It is important that you regularly check your credit report, since with so much information, the bureaus are bound to make mistakes on your credit report at some point.

The importance of good credit

Even though it may seem intrusive, the credit reporting agencies do provide a valuable service. They offer a place where lenders and others can go to try and determine your financial reputation. Without proof that you are a responsible borrower, it would be difficult for lenders to decide whether or not to lend you money, and what terms they should offer. A credit history allows them an easy way to check out your financial integrity.

And, since credit can be vital to your personal finances, it is important to take care that your report is good. You need to behave honorably with your creditors and with others, and you should check your credit report regularly to ensure that everything in there is correct and updated.