Consumer credit the 3 major credit reporting agencies

Posted: 02/09/2007--25/11/2008 || Rate this Article: 3 || Views|| Sign In || Register ||Hello Guest

Have you ever wondered how lenders decide whether to let you borrow money? How the interest rate is set? Maybe youve been turned down for a loan and want to know why.

Most credit decisions are influenced by the records maintained by three major credit reporting agencies. Those agencies are Equifax, Experian and TransUnion. Each of the credit agencies collects information about you from your banks, lenders, landlords and tax authorities. That information is then made a part of your credit report.

The three credit reporting agencies do not share information, so your credit report may contain different information depending on the credit reporting agency that maintains it. In general, each credit report will contain your name, your social security number and your date of birth. It will also show all of your credit accounts, including the credit limit and balance, and how timely you have been in paying each of them.

The credit report will also show whether you have had loans submitted for collection and whether you have filed for bankruptcy. Your credit report may have information about lawsuits filed against you, judgments that have been entered against you and whether your property is subject to any tax liens. It may also contain other information such as your current employer and occupation.

You can get current contact information for each of the three agencies at their own websites, or you can check bankrate.com for contact and other helpful information. You should get a copy of your credit report from all three credit reporting agencies at least once per year, and preferably every six months. There are ways to correct inaccurate information on your credit report, but you may not have time if you dont find out about the problem until you are in the process of applying for credit.

You may be entitled to a free credit report if you have recently been denied credit or live in a state that requires free credit reports. Although you may be able to access your credit report online, the free credit reports must generally be mailed to you. Check with each of the credit reporting agencies to see how many free credit reports you are entitled to. State law changes on a regular basis, so you may become eligible to receive free credit reports even if you werent able to in the past.

In addition to your credit report, the credit reporting agencies each maintain a credit score for you. Your credit score is a shorthand method for lenders to predict how likely you are to pay your bills. Your credit score can determine whether you will get credit and at what rate. Credit scores are used in granting mortgages, automobile loans, credit cards and even auto insurance.

The credit score assigned to you by a particular agency will reflect that agencys method for calculating the score, as well as the information contained in your credit report with that agency. Since each agency has different methods and information, your credit score can vary significantly at each of the three agencies. If you are in the process of applying for credit, you should check your credit score with all three agencies. This will help you avoid any unpleasant surprises.

Credit scores generally range from 300 to 850. A score of at least 720 will usually get you a better interest rate. You can find out your credit score by checking with each of the credit reporting agencies. Your credit score is not included in your credit report, so you will need to pay an additional fee to obtain it.

You can get more information about how your credit score is calculated by checking myfico.com. This website is maintained by Fair Isaac, the company that developed the credit score. Also at that website, you can order your credit score from each of the credit reporting agencies and find helpful information on how to increase your score. Youll also be able to see how increasing your score will help lower the interest rate that you will pay on various types of loans.