In the US, your credit rating is extremely important. It determines whether or not you can own a house, a car, or any other big-ticket item and the amount of interest you will pay in order to maintain the purchase.
Credit scores are compiled by agencies (otherwise known as credit bureaus). Understanding what they are, what they do, and why they are so important can help you improve your credit worthiness or maintain your current standing.
Who Are the Major Credit Reporting Agencies?
The three most prominant credit score agencies are TransUnion, Equifax and Experian. Their purpose is to provide credit scores to lenders.
These agencies collect any kind of information relative to credit, personal debts, loan information, etc., and hand this data over to lenders, banks and even employers who use it to evaluate your risk.
Just some of the information a credit bureau collects includes personal information such as your name, previous and current addresses; financial data such as how much credit you use with respect to how much is available to you; payment history (whether your bills are paid on time); the types of credit you currently have; and any bankruptcies or tax liens.
Where Do These Agencies Get This Kind of Information?
The information in your credit report comes directly from companies that have extended you credit in the past or from those with which you have open accounts. From creditors, lenders, utility departments, debt collection agencies, and open records.
Both positive and negative information is turned in such as data relative to when bills are late, debts are paid off, or the account has been maintained well for a long time.
Once a credit bureau has all the information, it is collected and put
through a complex algorithm to come up with a number: your credit score.
Any lender, bank or employer who requests to check your credit can then obtain your score and your detailed credit report through the agency.
Of course you too can have access to your own credit score for free. You are only allowed to access this information one time per year so that you can check how you are doing and make sure that everything is on the up and up.
Credit bureaus must grant you this as stipulated by the Fair Credit Reporting Act (FCRA) which is enforced by the Federal Trade Commission (FTC).
Main Credit Bureaus Address and Contact Numbers
If you are interested in more information about the three main credit bureaus, you can also contact them directly:
Here is the Trans Union address and contact number:
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
(800) 916-8800 or (800) 888-4213
Here is the Experian address (keep in mind that this agency was previously called TRW) and contanct number:
P.O. Box 2104
Allen, TX 75013-2104
Here is the Equifax address and contact number:
P.O. Box 105873
Atlanta, GA 30348
The Basics on Credit Score Agencies
Your credit rating plays an important role in your life. Having “good credit” can save you thousands of dollars per year on interest payments.
In contrast, “bad credit” can raise your interest rate payments or even prevent you from getting the loans for a home, car or any large purchase.
Credit bureaus came in picture when lenders wanted creditable consumer information to award loans and offer credit cards to applicants.
These agencies became source for consumer information to lenders and businesses and based on bureau information decisions on loan and credit cards were made.
Today in America there are three major credit bureaus or credit reference agencies, namely “Trans Union,” “Equifax,” and “Experian.”
These agencies collect data about individual consumers from various sources. Later they will consolidate collected data and provide as consumer credit information to banks, businesses, employment agencies and to credit card companies.
What these agencies collect is data about consumers current debit/credit ratio, bill paying habits, past history related to job, residence, credit card details and any derogatory remarks added to their consumer report.
All these information is vital to creditors and this helps them to decide and filter out the bad loan applications. Also it tells them what level of trustworthiness each individual holds. Based on their credit level each individual is awarded loan amount.
These agencies rate each individual consumer based on their past records. The rating they give as “Excellent”, “Good”, “Fair”, “Bad” and “No Credit”.
Against each rating credit score is calculated. The “excellent” credit rating will have credit score from 750 and above whereas “Bad” credit rating is classified as credit score below 600.
Credit Bureaus create business relationship with companies who furnish consumer data. Data furnishers are banks, credit card companies, utilities, collection agencies, public records holding companies etc.
All these information is consolidated against each individual consumer and is helpful for credit bureaus to rate them for credit worthiness.
It is advisable to check your credit report once a while. This will help individual to check wrong entries in file and also gives you chance take corrective measures if anything negative comes up in your file.
The three reporting agencies in America, which keep tab on consumers and document all their history in consumer reports are as follows.
How to Contact Credit Reporting Companies
Trans Union – Consumer Disclosure Center
Address: P.O. Box 1000
City: Chester, PA 19022
Contact Number: (800) 916-8800 or (800) 888-4213
Address: P.O. Box 105873
City: Atlanta, GA 30348
Phone Number: (800) 685-1111
Experian (formerly it was called TRW)
Address: P.O. Box 2104
City: Allen, TX 75013-2104
Phone Number: (888) 397-3742
Hopefully the above information has provided you with a better understanding of credit score agencies and how you can raise your credit score.
The bureau collects information related to how credit worthy you are. It forms a score that makes it easy for lenders to know how your history has worked out. It can be a really good thing for you if you have kept your credit score clean.
However, it can be frustrating if you have had financial difficulties, or have less than perfect credit. By monitoring your score with each of the three credit bureaus (Experian, Equifax, and TransUnion), you can get a good picture of you current financial health.