A credit reporting agency, also called a credit bureau, is a company that gathers information on the credit history of consumers. The information credit bureaus compile is furnished by lenders who have loaned money for cars, personal loans, credit cards, and mortgages. The historical data shown on a credit report is meant to gauge an individual’s creditworthiness and predict how likely it is that bills will be paid on time. This information forms the basis for a credit score.
Information Included on a Credit Report
What information is shown on your credit report? It includes:
- Credit limit of each account
- Current balance
- Date the account was opened
- Date of last payment
- Payment status and whether any payments have been paid late
- Hard and soft inquiries
- Whether you’ve been in collections
Your credit report also includes personal information such as your name, address, and social security. Public records such as liens, judgments, and bankruptcies are also reported.
How Many Credit Reporting Agencies Are There?
The question “what is a credit agency?” is usually followed by “how many credit reporting agencies are there?” When people think of credit reporting agencies, they usually think of the three major credit bureaus, which are Experian, Equifax, and TransUnion. Lenders usually rely on at least one of these credit bureaus when deciding whether or not to loan consumers money.
These credit reporting agencies are separate companies that compete for the business of lenders. There are several other smaller credit agencies that provide specialized information and customized reports.
The Value Provided by Credit Reporting Agencies
The information gathered by a credit reporting agency helps lenders decide whether you’re a good candidate for a loan. As important as credit reports are to lending decisions, it’s not only potential lenders who are interested in the information on your credit report. You may find that potential employers, landlords, and insurance companies refer to information on your credit report before making decisions.
Where Do Credit Bureaus Get Their Information?
Most of the information collected by the credit bureaus that shows up on your credit report is reported to them by creditors you’ve done business with, such as credit card issuers, credit unions, and banks. Some information is shared among credit bureaus, such as fraud alerts.
It’s not a requirement for creditors to provide data to all three major credit agencies. Your credit scores can vary between credit bureaus since they’re being calculated on different data.
Making Sure Your Credit Reports Are Accurate
Credit reporting agencies gather a large amount of data on millions of consumers, and it’s not uncommon to find a mistake on your credit report. You’re entitled to a free credit report each year from AnnualCreditReport.com. Review the information on your credit reports and make sure there isn’t any inaccurate information being reported.
If you find errors on a credit report, dispute it immediately. Dovly makes this process simple. With Dovly as your partner, keeping your credit report correct is a breeze. We’re an AI credit engine, and we can help you track, fix and maintain your credit report. Try it risk-free with our free membership tier.
