You hear about credit report agencies all the time, but what exactly are they? If you’re like most people, you have many questions about credit reports, agencies, and how they work. Here are some of your most frequently asked questions about these agencies.

Who are They?

There are three main agencies that compile and keep track of all credit scores. The top three are Experian, Equifax, and Trans Union. There are also smaller, local companies, but most financial institutions use the “Big Three”.

What is the Purpose of Credit Report Agencies?

Credit report agencies keep track of all financial activity. When a loan is applied for, the lender contacts the agency and checks the credit score of the person asking for the loan.

How do They Operate?

Credit Report Agencies use a numeric system to rank financial reports that is based on timely payments.

Banks and car loan institutions share information with one or more of these agencies, so when you apply for a loan, they can get your report.

The lenders base their decisions on the numerical value of the reports from the credit report agencies. To keep the reports fair, all credit agencies must comply with the Fair Credit Reporting Act.

Credit Bureaus

Credit reporting agencies do not share their information with each other. This means that you can have three different scores, depending on how each of these agencies scored your credit.

Information Collected by Agencies

The main purpose is to keep records regarding your payments, but they often keep much more than just your payment history. They also keep records on:

legal issues

• law suits
• legal judgments
• tax liens

Personal Information

• Name
• Address
• Social Security
• Number
• Date of Birth
• Employer
• Spouse
• Income

Reports

It is recommended that you get a credit report once every year. It is best to check your credit reports more often because of the high rate of identity theft, false reporting, and mistakes that can occur.

How Do I Get a Free Report?

Under Fair and Accurate Transaction (FACT) Act, the three main credit reporting agencies are required to offer one free report per year. It is very easy to get one of these free reports by visiting Equifax, Experian, and Trans Union online.

After the initial free report, they will charge you for any more credit reports.

Be sure to get your free report once every year and to be on the safe side, get at least one more. With identity theft on the rise, it’s always a good idea to keep an eye on your score to make sure no one is using your information and ruining your credit.
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