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Consumers should check online credit reports on file with Experian, Equifax, and TransUnion regularly to ensure that the information the reports contain is accurate. The Fair and Accurate Credit Transactions Act, or FACTA as it's called, makes it easier to dispute incorrect information in your credit report. Consumers can deal directly with the credit bureaus to dispute errors. Each of the big three credit bureaus offers online, telephone, and mail channels through which to pursue disputes. You can visit the company Web sites for more information. Regardless of whether you choose to deal with the credit bureau or directly with the business, you should dispute incorrect information in writing, and you should keep copies of everything. And remember, fixing an error at one credit bureau does not mean it will be corrected at the others. If the incorrect information is included in more than one bureau's database, you will need to pursue your dispute with each bureau individually. For more information on how to dispute inaccuracies in your credit report, visit www.privacyrights.org. There are links to government publications and other resources that will help you iron out any problems.
It used to be that credit bureaus provided information primarily to lenders trying to decide if an applicant was creditworthy. Nowadays, the information maintained in credit bureau databases is in demand by everyone from potential employers to direct mail marketers and landlords. In fact, some home owners and auto insurance companies are basing premiums, in part, on credit scores.
Promotional inquiries are those by companies wishing to sell you something. The company submits a set of parameters, or guidelines, and the credit bureau releases a list of names and addresses of individuals in the database who fit that criteria. Of course, the company seeking the information pays the credit bureau a tidy sum for the information.
Account management inquiries are those by companies wishing to see if you would qualify for their products. Neither promotional nor account management inquiries are considered “official” or "hard" inquiries, because they were not initiated by the consumer.
Hard inquiries are those made by businesses or individuals (such as lenders or credit card providers) who have “permissible purpose.” Permissible purpose is when consumers explicitly grant permission, most often in writing, to businesses or individuals (such as landlords) to check credit reports. These inquiries do show up in the “Inquiry” section of your credit report. Hard inquries can also cause a drop in your credit score where as all the other types of "soft inquiries" do not.
There are two main types of credit reports: consumer disclosure credit reports and regular credit reports. A consumer disclosure credit report includes all identifying, credit, and public information as well as some of the inquiry information in an individual's credit report. Federal law entitles an individual to receive a consumer disclosure credit report from Experian, Equifax, and TransUnion once every 12 months. A regular credit report includes most of the same information included in a consumer disclosure report, with the exception that it excludes information on certain inquiries that is only available to the consumer.
There are hundreds of local and regional credit bureaus, but almost all of them maintain a reporting relationship with one of the “Big Three” credit bureaus: Equifax, Experian, and TransUnion. Between them, these credit bureaus maintain credit reports on more than 170 million Americans. The data is used primarily by potential lenders, who check credit reports when determining whether to approve or deny credit applications.
You may have also heard about Innovis. This "fourth credit bureau" collects consumer data and sells it to creditors for the purpose of creating mailing lists. Individuals also should check their own credit reports on a regular basis to make sure the information is correct, and as a means of detecting identity theft.
Credit management and identity theft experts recommend that you check your credit report at least once each quarter to ensure that the information contained in the report is accurate and that no new accounts have been fraudulently opened under your name.
You should check your Equifax, Experian and TransUnion credit reports every few months by ordering your free yearly reports from www.annualcreditreport.com and purchasing them online. Subscribing to a credit monitoring service is the best way to keep a close eye on your credit reports.
Credit bureaus aggregate —or collect and compile— data from creditors, public records, and credit applications on more than 170 million Americans and store that information in databases that are used primarily by lenders during the credit application process.
All three of the major credit bureaus include virtually the same four categories of information. Identifying information includes your name, date of birth, Social Security and telephone numbers, and current and previous addresses and employers.
Credit history information includes your bill-paying history, loans, finance companies, and mortgage companies. Public records information includes information relevant to your creditworthiness, such as tax liens, court judgments, and bankruptcies.
Finally, the inquiries information includes a list of which potential lenders and other authorized parties have received a copy of your credit report within a certain timeframe. This section also includes information on companies that may have received your name and address for the purposes of offering you credit. If you wish to opt out of receiving pre-approved offers from these companies you can call 1-888-5-OPT-OUT or visit www.optoutprescreen.coM.
A credit bureau is an information clearinghouse that compiles information on consumers. The credit grantors, or lenders, report consumer payment history to the credit bureaus. The credit bureaus then compile that information together with information on tax liens, bankruptcies, and court judgments that is available in public records. In return, when consumers apply for credit, lenders can check credit reports to determine the creditworthiness of consumers.
TransUnion, similar to Experian, has been in the credit reporting business for about 40 years. It was the first of the credit reporting bureaus to provide online reporting and information retrieval services to its customers. As with the other two large credit bureaus, TransUnion offers an array of business and consumer risk- and credit-management products that are available via its Web site. If you are a consumer considering purchasing a TransUnion credit report, remember that federal law entitles each consumer to one free TransUnion credit report every 12 months. For more information on how to obtain your free credit check, visit www.annualcreditreport.com.
Experian is relatively new, but no less influential, on the credit bureau scene. In business for about 30 years, Experian (formerly TRW) offers the usual credit reporting and decision-making and information management services to lenders and other businesses. Consumers can purchase an Experian credit report or subscribe to the company's other consumer services on its Web site. Before paying for a credit report, though, remember that federal law entitles each consumer to one free Experian credit report every 12 months. For more information on how to obtain your free credit check, visit www.annualcreditreport.com.
Equifax is the grand-daddy of the “Big Three” credit reporting agencies. In business for 107 years, it originally opened its doors in 1899 and has grown to include more than 4,000 employees in 12 countries today. Equifax is a data aggregator, meaning that it compiles credit payment histories on consumers and provides that information to decision-makers at lending institutions. Equifax has expanded its products to include those for individuals as well as businesses. You can purchase an Equifax credit report or subscribe to the company's other consumer services on its Web site. You are also entitled to a free Equifax credit report once every 12 months thanks to a new federal law. For more information on how to obtain your free credit check, visit www.annualcreditreport.com.
In this day and age, we expect that all information related to credit is reported to the credit reporting agencies. However, this is not always the case. On occasion, a lender won't report your information. There is nothing in the law that says that your information has to be reported to the credit bureaus. Some banks and credit unions may choose not to provide information or if they do, they may not provide it to all three. There are many reasons that they may choose not to share your credit history and part of it may be that they do not have the manpower or technical capabilities to do this.
The place that stores the data and information pertaining to each consumer's credit history is known as a credit report bureau. You may also hear this referred to as a credit reporting agency. These companies maintain your information in a central location so that your credit – both good and bad – will follow you wherever you go. This helps make it easier to get a loan, but also helps to keep you from becoming the victim of identity theft. Since the information you provide on an application is compared to your national credit report, it sometimes makes it easier to spot fraud.
You can order your credit report directly from one of the three big credit reporting agencies, like TransUnion. When you go to their website and request your online credit report, they will ask if you want to pay extra for a copy of your credit score. Before agreeing to purchase any add-ons, review the fine print on what is being offered. Remember that banks and other financial institutions are interested in your FICO score. If the score being provided by the credit bureau is non-FICO, it really doesn't tell you anything.
While there are many websites offering you access to your free credit report, there are only three credit report bureaus. Each of these credit report bureaus may actually run some of these websites, using it as a way to reel a consumer in to their official website. Typically, they offer a free service, like a free credit report, free credit score or free credit profile in an attempt to get you hooked. They may try to upsell you and encourage you to spend more money on additional services. Another possibility is that they will encourage you to sign up for a monthly service where the first month is free, but the cost hits you each month after that.
When you request all three of your credit reports at the same time, you receive a merged credit report. Essentially this provides you information in a side-by-side format to make it easy for you to compare the information provided on each. It also provides you with the information found in each one that goes into determining the credit score each provides. Requesting your own credit report as often as you like is ok, since it does not count as an inquiry on your credit score. In fact, it is recommended that you check your credit report on a regular basis so you can catch fraud or inaccuracies early.
When looking to examine your credit history, did you know there are three major credit reporting agencies for you to check? Each of them maintains your information separately and, excluding fixing disputed information, they do not work together. Many consumers make the mistake of not checking all three, but maybe only requesting one, like Experian credit reports. Since you don't know what has been reported to each one, it is to your advantage to run a check on all of them and examine for errors.
One of the three major credit report companies, Equifax, is used by many businesses interested in learning about your credit history. Similar to the other two, this credit report company provides some basic personal information, as well as the credit history as it has been reported to them by your creditors. An Equifax credit report includes only that information which has been shared with them. Just like the other credit report bureaus, they do not go out and actively seek information on the consumers whose credit history they maintain. This is why it is important for you as a consumer to regularly check your credit report for fraud or other inaccuracies.
Getting credit used to be more complex since there wasn't always an easy way to access credit history information without contacting each lender directly. This led to a point where local credit agencies tracked information about you in that region. Now, a financial institution can easily find out everything they need to know about you by contacting any of the three big credit report agencies.
While they all compete against each other, many financial institutions report your information to each one on a regular basis. This allows your credit report to be reviewed no matter where you go in the
Thanks to the Internet, the 3-in-1 credit report is possible instantaneously. This allows you to work with one credit reporting bureau and pay a fee to have access to all three reports at one time. This makes it easy for you to monitor all three for inaccuracies. It can also help you watch out for fraud. If something seems odd on one report, it may be that you have become the victim of identity theft. Since many lenders check a 3-in-1 credit report when you apply for credit, it is a good idea to watch all three and fix problems immediately.
|Jennifer Mathes, Ph.D.|