Finance

14 Crazy Things You Must Know About A Credit Bureau

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Credit Bureau Definition

A credit bureau compiles data on an individual or a business including commercial credit information to sell to consumers, creditors, and lenders. The data collected is then combined into a credit report. A credit bureau is also referred to as a credit agency. There are many different credit bureaus, however, there are three main credit bureaus: Equifax, Experian, and TransUnion.

What is a credit report?

A credit report is a detailed snapshot of how you have dealt with credit in the past. Credit reports are analyzed by all types of businesses but especially banks, credit card companies, insurance companies, and employers amongst others. Your credit report is essentially a progress report that lets others know if businesses or individuals should give the okay to lend you money or verify your trustworthiness.

How do credit bureaus get information?

Credit bureaus receive information from businesses including mortgage companies, auto lenders, public records like liens or taxes, credit card companies, and banks are just a few. Besides providing consumers like you and me with annual credit reports, credit bureaus sell credit information to businesses. These businesses, in turn, use this information to sell products or services to qualified individuals. If you have received a letter in the mail from a credit card company, the good news is that your credit profile is on the upwards trend.

3 Main Credit Bureaus

The three main credit bureaus include Experian, Equifax, and TransUnion. Several other credit bureaus or credit agencies exist, however, these three are the most widely utilized.  You can obtain a free credit report annually from annualfreecreditreport.com from each of the three main agencies. Each of the three top bureaus compiles the credit information in a different format, however, the majority of topics should remain much of the same. If you find errors on your credit report, which we will discuss in a later section, you need to know where to turn. You can find each of the credit bureaus main website, phone number, and phone number listed below.

Contacting Equifax

Equifax is considered the largest and oldest of the credit bureaus.

  •         Visit Equifax.com to obtain your annual free credit report
  •         File a dispute due to any inaccuracies on your credit report
  •         Phone number to
  •         Snail Mail for disputes can be sent to:

                  Equifax Information Services, LLC

                  P.O. Box 740256

                 Atlanta, GA 30374

Contacting Experian

Experian is considered the next largest credit bureau.

  •         Visit Experian.com to obtain your annual free credit report or call 1-888-397-3742
  •         File a dispute online due to any inaccuracies on your credit report
  •         Phone number for placing a fraud alert: 1-888-397-37426
  •         Snail Mail for disputes can be sent to:

                  P.O. Box 4500

                   Allen, TX 75013

Contacting TransUnion

TransUnion is considered the smallest of the three main credit bureaus.

  •         Visit Transunion.com to obtain your annual free credit report or call 1-888-397-3742
  •         File a dispute online due to any inaccuracies on your credit report
  •         Phone number for filing disputes: 1-800-916-8800
  •         Snail Mail for placing a fraud alert can be sent to:

                TransUnion Fraud Victim Assistance

                P.O. Box 2000

                Chester, PA 19016

What is a fraud alert?

According to Credit Karma, a fraud alert is placed on your credit report to alert lenders and creditors that you may have been a victim of identity theft or fraud. As a consumer, you can place a fraud alert on your credit profile. This means that whenever your credit profile is accessed to open a new credit line, a series of questions need to be asked in order verify your identity. This process is part of the Fair and Accurate Credit Transactions Act or FACTA. According to Mortgage Compliance Magazine, the purpose of fraud alerts is to deter identity theft and improve fair lending practices.

Related Article: How Credit is Calculated and How to Improve It

How is my credit score calculated?

A majority of lenders use the FICO scoring model which calculates a score ranging from 300 to 850. The higher your score, the better your credit profile appears to creditors who will review your score along with your credit report. Another less popular credit scoring models includes VantageScore which prioritizes different types of factors for your credit score. It’s important to know that both TransUnion and Credit Karma typically use VantageScore when calculating your score, so you may see a difference in the score between credit bureaus. In addition, some creditors may use a median of the three credit bureaus’ score to qualify consumers for a loan, however, these other qualification factors are up to the lender to decide.

Related Article: How to Pay off Your Credit Card Debt Faster

Credit History definition

Credit history refers to the account information and details that are listed on a credit report. Account information such as balance, creditor name, account open date, and payment history provides both consumers and creditors with an overview of how well you have paid your credit. Payment history accounts for 35% of your FICO score so paying your bills on time is an imperative aspect of your credit health. Likewise, late payments made after 30 days past the due date stay as a negative mark on your credit for at least 7 years.

Related Article: Credit reports demystified

How do I freeze my credit?

A credit freeze is a secure way to deter identity theft by “freezing” access to your credit report. One of the positive aspects of a credit freeze is that you can still apply for employment, apply for a lease on an apartment, and obtain your free credit report. What differs is that if your credit profile is hacked through a data breach by a retail company and your account is no longer secure, anyone who attempts to open a new credit line in your name will be derailed. Freezing your credit is free through each of the three credit bureaus. One downside of a credit freeze is that in order to officially open new credit such as a mortgage, auto loan, or new credit card, you must go through the process of unfreezing your credit and then refreeze the accounts after your credit applications are reviewed and approved.

How to freeze my credit with the credit agencies

Unfortunately, freezing your credit with the credit bureaus, isn’t as easy as applying for a credit card or loan. In fact, the process can be riddled with confusing steps. That’s why I’ve compiled a list of easy to access information for each of the three credit bureaus or agencies. Equifax requires you to create an account online to freeze credit, but also accepts phone inquiries at (800) 349-9960 or by completing a form and submitting your request via mail. You can place, lift, or modify your credit freeze for Experian here. TransUnion’s website for placing, modifying, or lifting credit freeze is available here.

How do I file a credit dispute?

Another thing you might want to know is that a credit dispute is an official request to remove credit information on your credit report. For example, if you access your annual free credit report on Annual Credit Report’s website and notice that your account history shows an account that you did not open in your name, you may file a credit dispute with the credit bureaus directly.

To file a credit dispute, each credit bureau has a separate online dispute center. You will need to compile all of your pertinent and applicable documentation before initiating your dispute.

What you should include in your dispute

Next, there are few things you may want to include with your dispute. 

    • A copy of your credit report from the credit bureau that has reported the account in question.
    • A reference number of your credit report which is normally on the first page of your report.
    • The creditor’s name (i.e. Target, Walmart, Kohl’s, etc.) and a portion of the account number, date of the transaction in question.
    • A detailed formal explanation of the reason for the dispute
    • Any applicable documentation such as monthly statements or other credit bureau’s credit report ( for example. if an account history shows that you have made a payment on time but the credit report shows a late payment).

Things to consider

Lastly, credit disputes are a great way to remove inaccurate information on your credit report. Credit disputes are NOT to be used as a way to instantly increase your credit score. Normally creditors and other lenders have fail safes against placing disputes even though the information is accurate. 

Conclusion

Life can get messy and so can your credit. It is so important to come up with a plan to improve your score over time and have a method of attacking it. If you aren’t sure of a place to start, make sure to access your free credit report online. Then make a habit of checking your credit at least once a year. You can check out a few websites like Quizzle.com or QLCredit to review your score and look at recommendations to improve your credit.

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