What do credit bureaus do??

Question

please help

Answer 1

They're like a data bank that stores credit information. They are not credit granters. Your lenders report your credit history to them so that other companies can see how you treat credit. The bureaus only hold the info and release it.

Answer 2

They accumulate reports from credit vendors as to your payment history. When you want to open a new line of credit, the vendor can check with the credit bureau to see how well you pay your bills, and if you've been sloppy, you will either have to pay more for credit or may not get it at all. It's a way of quantizing risk.

Answer 3

They collect and store people's credit information and calculate your credit score based on a formula. Then when you apply for credit, companies ask them about you and they provide that stored information to them so the company can determine if you are reliable or if you are risky.

Answer 4

issue credit to people.

Answer 5

There are 3 major credit bureaus...

Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374-0241

Experian: (Formerly TRW Credit Bureau) 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013

TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Credit bureaus, also known as credit reporting agencies (CRAs), collect this information from merchants, lenders, landlords, etc., and then sell the report to businesses so they can evaluate your application for credit. In other words, they collect information from as many consumer financial transactions or inquiries as they can. Lenders make their decisions based on different criteria, so having all of the information helps them ensure that they are making the right decision.

A credit score is a number that is calculated based on your credit history to give lenders a simpler "lend/don't lend" answer for people who are applying for credit or loans. This number helps the lender identify the level of risk they may be taking if they lend to someone. While the same end result can come through reviewing the actual credit report (which lenders usually do), the credit score is quicker and less subjective. The system awards points based on information in the credit report, and the resulting score is compared to that of other consumers with similar profiles. With this information, lenders can predict how likely someone is to repay a loan and make payments on time. It's the credit score that makes it possible to get instant credit at places like electronics stores and department stores.

Credit Bureaus then sell access to that combined information to anyone who has a legally-recognized reason (permissible purpose).

In case you didn't know it, one permissible purpose is to sell your information to companies looking to send out credit or other offers. It works like this:

A major credit card company, let's say American Express, wants to promote a new credit card. They contact the credit bureaus and deliver a profile of the kind of person they think will be interested in the new card. The profile might include things like personal income, region or state the person lives in, number of credit cards, credit score, etc. The credit bureau then searches through their records looking for anyone that matches that profile. If you fit the profile, an offer is mailed to you or someone calls you on the phone at dinner time. It's one of the ways the credit bureaus make money.

Accessing Your Score

Until recently, your credit score was not available to you. Only lenders and other businesses that used the score could access it. Fair Isaac and Company felt that the score would only confuse consumers since there was nothing to tell them what it meant or what the lenders were looking for.

In 2001, however, all of this changed due to pressure from the U.S. Congress, industry, and consumer groups. Now you can get your credit score at a number of Web sites, including the big three credit bureaus, and at Fair Isaac's Web site. You can also ask your lender for access to your score when you apply for a loan.

The Credit Bureaus will try and charge you for the credit report or credit score. The only way to get access to this information for free or as close to free as you can get is by US mail (you will pay postage). If you apply for credit somewhere and you fail to get credit. You will be sent a rejection letter of your failure to receive credit from most likely a sub -contracted company that looked into your credit history. This rejection letter tells you nothing but that you failed to receive credit through the lender because of your credit history. You will then have to contact one of the 3 major credit companies by mail sending them the rejection letter and a letter of your own included with it requesting an explanation of why you were not approved. Then they should send you your credit report or they will be in contact with you to verify your information. I would also request that they provide you with your credit score. They will not give it to you if you don't request it. They may even try to charge you for your credit score.

Think of your credit score like you would a grade in school. A teacher calculates grades by taking scores from tests, homework, attendance and anything else they want to use, weighting each one according to importance in order to come up with a final single number (or letter) score. Your credit score is calculated in a very similar manner. Instead of using the scores from pop quizzes and reports you wrote, it uses the information in your credit report.

The number itself can range from 300 to 900. The formula for exactly how the score is calculated is proprietary information and owned by Fair Isaac. Here, however, is an approximate breakdown of how it is determined:

* 35% of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how timely) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection, any bankruptcies, etc. When these things happened also comes into play. The more recent, the worse it will be for your overall score.

* 30% of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25% or less of their limits.

* 15% of the score is based on the length of time you've had credit. The longer you've had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.

* 10% of the score is based on the number of inquiries on your report. If you've applied for a lot of credit cards or loans, you will have a lot of inquiries on your credit report. These are bad for your score because they indicate that you may be in some kind of financial trouble or may be taking on a lot of debt (even if you haven't used the cards or gotten the loans). The more recent these inquiries are, the worse for your credit score. FICO scores only count inquiries from the past year.

* 10% of the score is based on the types of credit you currently have. The number of loans and available credit from credit cards you have makes a difference. There is no magic number or combination of types of accounts that you shouldn't have. These actually come more into play if there isn't as much other information on your credit report on which to base the score.

Answer 6

Ask questions...

Answer 7

read at www.transunion.com