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The credit bureaus collect financial information on all consumers to create credit reports for each individual. The information in these credit reports determines your credit score, which can impact what kinds of financial opportunities you get access to. If you’re prioritizing your credit, you should know what affects your score, and that includes learning what information the credit bureaus collect. This can help you improve and maintain a high credit score and secure a solid financial future.
What are the credit bureaus?
There are dozens of credit bureaus in the U.S., but most people interact with the three major nationwide credit bureaus: Equifax®, Experian® and TransUnion®. Financial organizations and lenders submit information about consumers and their loans, including open balances, missed payments, late payments, bankruptcies, judgments and more. The credit bureaus compile this data and create a credit report on each consumer.
Lenders and creditors can then pay to get access to these reports to understand how reliable someone is with credit. Consumers can also get access to their own credit reports.
Where do the credit bureaus get their information?
The credit bureaus rely on financial institutions, lenders and businesses to provide consumer data. Your bank or credit union will share information, but so will other lenders, such as retail stores you have a credit card with, dealerships where you have an auto loan, and more. Additionally, credit bureaus can get relevant credit information, such as bankruptcy filings, from public court records.
All these sources continuously provide updated information on your account status and payment details to the bureaus.
It’s important to note that your credit report may not be the same at all three credit bureaus. The credit bureaus depend on lenders to submit data, so if one bureau doesn’t receive certain information, it’ll produce a slightly different report. Additionally, credit bureaus don’t typically share their data with each other, which is why they may create different consumer files.
What kinds of information do the bureaus want?
Credit bureaus are only interested in information that’s relevant to your credit report. This includes:
- Personal information—name, address, employer, birth date, Social Security number
- Credit account information—payments, dates, balances, credit limits, credit usage, when accounts were opened and closed
- Credit inquiries
- Debt collections
- Bankruptcies, foreclosures, repossessions
- Public records
Why does this information matter?
All of the information credit bureaus collect is used to create your credit report and credit score. Your credit score can impact many areas of your life, dictating whether you get approved for a rental lease, an auto loan, a mortgage, certain credit cards, certain loans, and more. A strong credit score not only opens doors to new financial opportunities but also locks in better loan terms for the credit you do take.
As you understand what the credit bureaus collect for your report, you can make sure to focus on the right areas to improve your credit.
Who can see the data the bureaus collect?
Credit bureaus can share your credit report with authorized sources. Aside from yourself, the groups that can potentially gain access to your report are:
- Potential lenders and creditors
- Insurance companies
- Landlords
- Employers
These parties can “inquire” into your credit with a soft or a hard inquiry. Both of these types of inquiries seek to gain insight into how responsible a borrower you are. The main difference is that a hard inquiry hands over a lot more information.
For a lender to get access to your full credit report, you have to approve the party for a hard inquiry. A hard inquiry will lower your credit score by a few points, but it should bump back up after a couple of months. However, allowing several hard inquiries in a short period can significantly lower your score. As a result, you should do your best to spread out hard inquiries by a few months. If you’re comparing lenders, you could ask them to run a soft inquiry and only allow your top choice to run the hard inquiry into your credit.
How can I see what information the bureaus have on me?
Credit Bureaus must allow you to access your own credit score. Under the Fair Credit Reporting Act (FCRA), every consumer is entitled to one free copy of their credit report from each credit bureau annually. If you need your report more than once a year, you can also pay for more frequent reports.
Additionally, you can opt to make a soft inquiry—such as a credit score check—rather than pulling your full credit report. Most financial institutions now offer free credit score checks through their online banking platforms. A credit score will tell you where you stand, but it won’t provide the background information as to why your credit score is what it is. If your credit score suddenly takes a significant dip, you should pull your credit report right away to see what happened.
Overall, checking your credit report regularly is part of being financially sound. You should be reviewing your report for errors or other disputable items. Anything on your report that’s incorrect could be unnecessarily dragging your score down, so you should file a dispute to have it removed.
What do I do if my reports have an error?
According to a 2021 Consumer Reports survey, approximately 34 percent of participants had a mistake on one of their credit reports. That means even you may have an error on one of your credit reports. You’re legally entitled to a fair and accurate credit report, so you can file a dispute with the credit bureau in question if you do find an error.
You should always file a dispute if you find incorrect information on your credit report. Something as small as an incorrect spelling of your name or birth date could result in someone else’s debts being added to your report. Other common mistakes are debts being reported twice or marked as owing even though they’re current, which can lower your credit score.
While you can file credit disputes on your own, many people opt for credit repair services. Credit repair consultants will review your report for you, find any errors and file disputes on your behalf. The credit repair consultants at Lexington Law Firm can help you get back on track toward a path of strong credit and new financial opportunities.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
