Where Do Credit Reports Come From

You may have a dream of buying a new house a car, a boat, or some other high value item. Most likely you don’t have the cash on hand to buy these high ticket items. Lines of credit, mortgages, loans, and credit cards are all available to help you fulfill these dreams. Your lender will want to have some information about your credit history before they decide that they will or will not loan you money for the things that you want. The information about your credit history is available through certain agencies that are responsible for gathering information about consumer credit. These agencies will rank you against other consumers who use credit. This ranking is called a credit score.

Your credit score can be the deciding factor in whether or not you are able to obtain a loan, credit card, or line of credit. When you ask someone to loan you money, they will want to make sure that you are worth the risk. In order to make a determination, they request a credit report. Credit reports reveal your history of borrowing money and paying it back. If there has ever been a judgment against you for defaulting on borrowed money or if you have a history of paying late it will show up on your credit report. The amount of debt you have and the number of open accounts as well as outstanding loans you have will show up on your credit report.

When you apply for credit or a loan, the prospective lender will ask for your personal information, such as your name and address social security number and employment history. They then give this information to a consumer reporting agency or CRA. The CRA gets paid to research your credit history and provide the business with your credit report. CRAs store consumer’s credit history on a database. Any time you use credit, the CRA adds it to their database.

The three most widely used CRAs in the United States are Experian, Trans Union, and Equifax. Any time you get a credit report, it most likely came from one of these three companies. Over 500 million consumers around the world are part of these companies’ databases. Reporting on this many consumers is no small task.

It is wise to obtain a copy of your credit report. If you’ve ever had a credit card, a student loan, mortgage or any other type of loan, you have a credit score. Knowing what is on your credit report is important. If there are errors on your credit score you will want to take steps to correct them. Because there are so many records on this CRA’s database, it is entirely possible that there are mistakes. If you have a low credit rating there may be some steps that you can take to bring your score up. Under the fair credit reporting act of 1970 new were entitled to a copy of your credit report if you were never denied a loan.

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