The credit industry is large and complex, with many moving parts. To understand how credit bureaus can help you, you must first know how they operate.
Read on to learn the basics of the credit reporting industry and how credit bureaus can help you.
What Are Credit Bureaus?
Credit Bureaus are reporting companies that are specifically designated for the collection and assessment of your financial information. Information like debts, payments, repayment history, tax liens, and other various financial details. They take this information and sell it to different entities who are financially accessing you. This includes employers potentially offering you a job, landlords potentially offering you a lease, and banks potentially offering you a loan.
There are three main credit bureaus that you should be aware of. They are Experian, Equifax, and TransUnion. Banks and other financial lending companies use these bureaus to check on financial history and determine the risks of lending money to someone like you. Essentially, the report that comes from the bureaus can make or break your ability to get any type of loan.
Many other small bureaus focus on more detailed information, like evictions and other specifics, but the largest and most accurate financial database can be found among these main three.
What Can Credit Bureaus Do?
You may have some questions regarding the power of a credit bureau. After all, they are the determining factor for many of the life-changing decisions you wish to make. Questions like “What if they get the information wrong?” or “Am I able to see my score?” “How long will negative information stay if I mess up?” These are great questions, and they are about to be answered.
What if They Get the Information Wrong?
If you check your credit score and discover that something doesn’t seem accurate, you can dispute it. Credit Bureaus are required to correct or eliminate the disputed information. This can take up to thirty days to complete.
Am I Able to See My Score?
The three major credit bureaus allow you to request a free annual credit report. After that, you will need to pay for any additional credit checks.
How Long Will Negative Information Stay?
Negative information, known as derogatory marks, will only stay on your score for seven to ten years, depending on the offense. These remarks include civil lawsuits, late payments, and bankruptcies. If the information is not taken down after this time frame, you can file a dispute to have it removed.
Where Does the Information Come From?
Credit bureaus get their information from other financial companies called furnishers. These companies include credit card companies, credit unions, banks, and just about any other financially driven business you could think of if you have used one of these businesses within the past seven years. So the odds are that you are in at least one of the three major credit bureaus’ databases.
These furnishers voluntarily report information to credit bureaus, typically once a month. Their benefit is that their customers know there is risk involved in not paying what they owe in time. In addition, no one wants a negative remark on their credit score.
How are Credit Reports Used?
Credit reports are most often purchased by the furnishers that offered them the information. As mentioned above, landlords, loan servicers, and banks are the main businesses that use this information. They use credit reports to decide whether your application will be approved or not. If you are applying for a loan or credit card, this will also determine the interest rates issued to you.
Credit Bureaus Can Help You
The credit reporting world can be confusing, making it difficult or expensive to find out all of the information you want to know. That is why it’s essential to go to the right places for help. If you own a business, a credit bureau that uses cutting-edge API technology can make your life easy by handling all of your credit reporting needs.
This type of bureau offers information from the major credit databases while giving you excellent customer support and user-friendly methods that seamlessly integrate into any current operations you may have set up.
Summary
Three major credit bureaus have the largest database of reports from other companies known as furnishers. These companies report credit information to the bureaus to ensure that their customers pay them timely and adequately. In addition, credit reports are used by loan servicers, credit card companies, and landlords to determine whether or not you are financially eligible for their services. Other credit bureaus can help you navigate this long and complex process by providing everything you need to get through it.
