Credit Reporting Agencies
There are three major credit reporting agencies, and
they compile histories about consumers. The three agencies
are: Experian, Equifax Information Services, and Trans
Union Corporation. They know whether or not you pay
your bills on time, they know whenever you apply for
a credit card, regardless of whether or not you actually
get the card.
The three majors know where you live, where you work
and how much money you make. If there are any liens,
bankruptcies, foreclosures, defaults, or judgments,
they know about that, too. In short, like Santa Claus,
they know when you’ve been naughty or nice.
These credit reporting agencies sell this information
to companies you want to do business with. When you
apply for a mortgage, the lender will typically get
a credit report from all three agencies, so if any one
agency may have missed catching you in a late payment,
chances are, one of the other agencies have it on record.
The credit reporting agencies only provide the data,
they don’t make the decisions. Rather, that responsibility
is deferred to the lender.
There are some guidelines that these agencies, and
the companies that subscribe to their services, must
follow. It’s called the Fair Credit Reporting
Act. Under this act, any company wanting to acquire
your credit file must have your consent. The company
is prohibited from selling the information they acquired
The credit reporting agencies themselves, however,
are allowed to sell lists to banks and credit card companies
for the purpose of solicitation. If you apply for credit
and are denied, you have the right to see a copy of
the credit bureau report within 60 days.
With so much personal information contained in this
file, it’s definitely worthwhile to pay the small
fee to obtain a copy of your credit report periodically
to ensure that there are no mistakes.