What to Know About Credit Bureaus

Credit bureaus are the organizations that collect and keep track of your credit history and other information that may be important to potential lenders, landlords, or even employers. Creditors, lenders, utility companies, and other agencies report the following to the credit bureaus:

• How much debt you have,
• Whether you make your payments on time
• How much credit you use

The credit bureaus also keep track of things such as your current and previous addresses, date of birth, social security number, and name.

How the credit bureaus help consumers and lenders

Credit reporting agencies are basically a clearinghouse for all of your credit information. Without them, information about your credit history would be practically impossible to find. Credit bureaus centralize the collection of this information and streamline it into credit reports, making the information more accessible and easier to understand. By pulling all of your credit information together in one place, credit bureaus are able to create a complete picture of how an individual uses credit.

The bureaus use these reports to determine your credit score. They apply a mathematical algorithm to the information to come up with a number. This number basically summarizes your credit history, making it easier for potential lenders, landlords, and sometimes even employers to determine how much of a “risk” you are.

Know the three different credit bureaus

There are three primary credit bureaus in the United States, Experian, Equifax, and Trans Union. Each bureau may receive information from different organizations, and each has its own algorithm for determining credit scores. Therefore, your score may be different depending on which agency you get your score from. Some lenders will pull reports and scores from all three agencies, while others will only check with one.

Identifying credit report mistakes that you can dispute

Each piece of information on your credit report affects your credit score differently, so it is important to make sure all of the information is correct. There are many services that offer credit help for checking over your reports. If anything is incorrect, these services can also help you through the process of a credit dispute.

Many credit dispute issues arise from the different information that each agency collects. There may be an error on one report but not another, and credit disputes corrected with one agency will not guarantee that the error will be corrected on another agency’s report. If you seek credit help, you will want to get your reports from all three agencies, so that you can find any discrepancies and make sure that all of them are disputed and fixed on all of your reports.

For more information on initiating a credit dispute or for credit help, contact Lexington Law.

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Tags: credit dispute, credit help