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Credit Bureaus

The Big Three Bureaus: Credit Reporting Powerhouses

How do the bureaus of credit decipher all this data?  Because there are so many consumers who are filing for credit at once, the credit bureaus assign a number to a case, based on the credit history.  This number alerts potential lenders to any dangers or risks the applicant might hold.  As you can imagine, this saves a lot of time in personally analyzing each case individually.  The credit score usually ranges from 300 to 850, with 300 being the lowest.  After seeing a report and score from the bureaus of credit, the new lender may choose to decline an application or raise the interest rates significantly.

However, the commercial companies are not the only ones that can access this information.  Since this information pertains to you, you have a right to view it at anytime, as stated by the FTC.  Furthermore, you get one free report every year from each of the 3 major credit bureaus.  Don’t take this right for granted.  In fact, most consumer welfare advocates suggest that you check your credit once a year, even if you are not expecting any loans anytime soon.  This is to ensure that the reports are accurate and that no errors or fraudulent activities have taken place.

In addition to a free report, consumers can also request commercial reports from the bureaus of credit, which include information on credit score (FICO, or a score unique to each bureau) as well as credit monitoring, which informs a consumer through email whenever there has been a change recorded on file.  Along with credit insurance, this is an ideal protection against any accidental or criminal damage to your good name.