What You Need to Know About Credit Reporting Agencies

A credit reporting agency is responsible for collecting your credit information and data. These agencies sell your credit information to creditors, lenders, and consumers in the form of a report, called a ‘credit report.’ It can affect your financial decisions and stability. 

Your credit report is used to evaluate whether you’re considered a ‘risk’ when you want to lease something or even buy a property. The report will also increase or lower your chances of getting loans, insurance coverage, or even a new job because employers use these reports as a form of evaluation. 

However, some credit reporting agencies offer more than just credit information. They can also assist you with your business and help you make smarter decisions. All need to know about credit reporting agencies can be found below. If you’re interested, keep reading! 

The Big Three

There was once a time when there were too many small credit reporting agencies but, slowly and gradually, they accumulated into the three big agencies known as Equifax, TransUnion, and Experian. With the smaller agencies and big three combining, it is now easier for these companies to get more data than before. 

These three agencies are still up and running and only getting bigger. Currently, they have a database that holds information about more than 200 million Americans. Nearly all lenders and companies will access your credit information via any of these three companies to do a pre-check before lending to you or even employing you. 

Things You Need To Know 

• Credit reporting agencies are selling your information and receiving them from lenders and companies you buy from. These agencies are kept up to date about whether you’re paying your bills on time, if you have any debt that you need to pay off, and if you’ve taken any loans. 

• These agencies will also stack up on your public record, tax returns, and bankruptcy information. All of these will be a part of your credit report because they determine your kind of borrower. Hence, they’re used to evaluate if your loan application should be accepted. Companies and lenders will buy relevant information from these credit reporting agencies before allowing you to acquire the services they offer.

• All U.S. citizens can get a copy of a credit report from each of the three credit reports, free of cost once every year. To get these free copies, you need to submit a request using AnnualCreditReport.com. This site is sponsored by the big three agencies that were mentioned earlier. However, these copies will not show your actual credit score, but only an overview. You can view your actual credit score for a fee. Nonetheless, it’s a smart idea to print these free credit reports and keep your data.

• These credit reporting agencies get most of your data from companies you’re dealing with. If you owe a company money, they’ll be more than willing to share your data with these agencies. These companies believe that many people will be more likely to pay their debts and bills on time by sharing data. 

Conclusion

This is only the tip of the iceberg. These credit-reporting agencies collect your data from every source possible. All the companies you are associated with are also associated with the big three agencies and are regularly selling your data.

Hence, try to always pay your bills and debts on time. If you fail to do so, it will go on your credit report. A poor credit score can seriously affect your ability to get a credit card, a bank loan, or avail many other services.