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Credit Bureau

An agency that keeps your credit record.

When applying for a loan, the lender checks your credit rating to determine if you are a good candidate for a loan.  A credit bureau provides this information to the lender.


Credit bureaus are also known as consumer reporting agencies.  There are three national credit bureaus – Equifax, Experian, and TransUnion.  They provide credit scores on individuals based on the credit history.


Credit scores come from a variety of data.  The credit bureau looks at a person’s credit applications, public records, and any reports submitted by lenders.  Looking at the borrower’s amount of credit and diligence in repaying it, the credit bureau generates a credit score based on this credit history. The credit history includes a variety of financial information about a person.  For example, it shows all of the open and closed accounts as well as the start dates for those accounts.  It also shows the credit limits, loan amounts, and any outstanding balances.  The credit history keeps record of payments and payment patterns and reflects any co-borrowers or co-signers on any of the loans.  Finally, a credit history keeps track of any inquiries into credit scores.


Credit bureaus do not determine whether or not a person can get a loan.  They merely provide the credit score, which the lender then uses to decide whether or not the person is a good loan risk.  The lenders have to actually buy these credit reports from the consumer reporting agencies.  Using the credit report as well as other factors such as income, assets, job history, etc., the lender gets a complete financial picture of the potential borrower and can make a decision whether or not that person can qualify for the loan.


Also, federal law requires credit bureaus to provide individuals with a free copy of their credit report once every twelve months.  It is wise to know what is in your credit report so there are no surprises when you apply for financing.  Mistakes can happen and by checking your credit report once a year, you can make sure any mistakes get corrected.