A credit bureau is a company
that collects information from various sources and provides consumer credit information in the form of Credit
Bureau Reports on individual consumers for a variety of uses.
This helps lenders assess credit worthiness, the ability to pay
back a loan, and can affect the interest rate and other terms
of a loan. Interest rates are not the same for everyone, but
instead can be based on risk-based pricing, a form of price discrimination
based on the different expected risks of different borrowers,
as set out in their credit rating. Consumers with poor credit
repayment histories or court adjudicated debt obligations like
tax liens or bankruptcies will pay a higher annual interest rate
than consumers who don't have these factors.
In the U.S., credit bureau reports are compiled
via the collection and collation of personal information and
financial data on individuals from a variety of sources called
data furnishers with which the bureaus have a relationship. Data
furnishers are typically creditors, lenders, utilities, debt
collection agencies and the courts (i.e. public records) that
a consumer has had a relationship or experience with. Data furnishers
report their payment experience with the consumer to the credit
bureaus. The data provided by the furnishers as well as collected
by the bureaus are then aggregated into the credit bureau's data
repository or files. The resulting information, contained in
Credit Bureau Reports is made available on request
to customers of the credit bureau for the purposes of credit
assessment, credit scoring or for other purposes such as employment
consideration or leasing an apartment.
Given the
large number of consumer borrowers, these credit scores tend
to be mechanistic. To simplify the analytical process for their
customers, the different credit bureaus can apply a mathematical
algorithm to provide a score the customer can use to more rapidly
assess the likelihood that an individual will repay a given debt
given the frequency that other individuals in similar situations
have defaulted. Most consumer welfare advocates advise individuals
to review their credit reports at least once per year, in order
to ensure that the reports are accurate. Consumers can do so
at no cost. They are entitled to a free annual credit report
from each of the 3 nationwide consumer reporting agencies,
Equifax, Experian and TransUnion.
Contact Information For Major Credit Bureaus
Experian
PO Box 2002
Allen, TX 75013
(888) 397-3742
Web site: www.experian.com
Equifax
P.O. Box 740256
Atlanta, GA 30374
(800)-685-1111
Web site: www.equifax.com
TransUnion
P.O. Box 2000
Chester, PA 19022
(800) 888-4213
Web site: www.transunion.com
RESOURCES: Credit Bureau Reports
FTC Bureau
of Consumer Protection - Consumer Information: Credit & Loans
Credit Report
and Score Information from Experian.com
TransUnion
- Check Your Credit Report and Credit Score Online, Instantly
and Securely
Equifax
Products: Credit Reports, Credit Scores & Identity Theft
Protection
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