Definition
A Credit Rating Service or Credit Bureau is an organization tasked with collecting and maintaining individuals’ and businesses’ credit records, evaluating their creditworthiness, and producing credit reports. These reports help lenders and financial institutions make informed decisions about extending credit, setting interest rates, or offering loans.
Commonly known as Consumer Reporting Agencies (CRAs), these bureaus collect data such as payment history, outstanding debts, credit limits, and public records, which is used to create a credit score. This score reflects the creditworthiness of the individual or entity and impacts their ability to secure loans, mortgages, or other forms of credit.
Examples
Here are the three predominant credit bureaus in the United States:
-
Equifax
- Address: Equifax Information Services, 1550 Peachtree Street NE, Atlanta, GA 30309
- Contact: 404-885-8910
- Website: www.equifax.com
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Experian
- Address:
- (North American Operational Headquarters) 475 Anton Boulevard, Costa Mesa, CA 92626
- Contact: 714-830-7000 or 714-830-2449
- 955 American Lane, Schaumburg, IL 60173
- Contact: 224-698-5600
- Customer Support: National Consumer Assistance Center, 888-EXPERIAN (888-397-3742)
- Website: www.experian.com
- Address:
-
TransUnion
- Address: 555 W. Adams Street, Chicago, IL 60661
- Contact: 800-888-4213
- Website: www.transunion.com (See Contact Us page for additional phone numbers)
Frequently Asked Questions
How do Credit Bureaus obtain credit data?
Credit Bureaus acquire credit data from creditors, public records, and collection agencies. They compile this information into credit reports which are used to determine credit scores.
What can someone do if there’s an error in their credit report?
One should contact the respective credit bureau to dispute the erroneous information. Each bureau has processes in place for consumers to challenge inaccuracies, often initiated through their websites.
How often can individuals check their credit reports for free?
By law, individuals are entitled to one free credit report annually from each of the three major credit bureaus. During special circumstances (like the COVID-19 pandemic), individuals may temporarily access their reports more frequently.
What factors influence a credit score?
Credit scores are influenced by payment history, credit utilization, length of credit history, types of credit accounts, and recent credit inquiries.
Do credit inquiries affect the credit score?
Yes. Hard inquiries, such as those resulting from credit applications, can lower the credit score slightly. Soft inquiries, such as those by individuals checking their own credit or by employers, do not affect the score.
Related Terms
- Credit Score: A numeric expression that represents the creditworthiness of an individual, typically ranging from 300 to 850.
- Credit Report: A detailed report of an individual’s credit history, compiled by a credit bureau, for use by a lender in assessing the borrower’s creditworthiness.
- Credit Utilization: The ratio of a consumer’s credit card balances to their available credit limits, indicating how much of their available credit is being used.
- Hard Inquiry: A credit check that occurs when a financial institution views one’s credit, often leading to a slight decrease in the credit score.
- Soft Inquiry: A credit check that doesn’t affect the credit score, such as those done by consumers checking their own credit reports.
Online Resources
- Annual Credit Report - The official site for consumers to request their free annual credit report from the three major credit bureaus.
- Consumer Financial Protection Bureau (CFPB) - Offers information on handling credit reports and disputes.
- MyFico - Provides credit scores and information on how FICO scores are calculated.
References
- Equifax. (2023). Equifax Information Services. Retrieved from www.equifax.com
- Experian. (2023). Experian. Retrieved from www.experian.com
- TransUnion. (2023). About TransUnion. Retrieved from www.transunion.com
Suggested Books for Further Studies
- “Credit Repair Kit for Dummies” by Steve Bucci
- “Your Score: An Insider’s Secrets to Understanding, Controlling, and Protecting Your Credit Score” by Anthony Davenport
- “Credit Repair: Make a Plan, Improve Your Credit, Avoid Scams” by Amy Loftsgordon and Cara O’Neill
