Credit bureaus assign scores to your credit report based on how you've paid your bills, the amount owed, and the length of time since you've applied for new credit. These scores allow lenders to predict whether you will be able pay your bills in a timely manner. These scores range from 300 to 800, with a higher score indicating that you pay on time. Credit bureaus are responsible for analyzing, synthesizing, and presenting this information to lenders and other businesses.
The three main credit bureaus are Equifax, Experian and TransUnion.
Credit bureaus monitor your credit history and determine whether you are a risky borrower. There are many credit agencies, but most lenders only use one or two of these three. Equifax, for one, was started in 1899 as a retailer credit company and had branches across North America by the 1920s. Credit files were maintained for millions of Americans.
Each bureau has a unique business model and offers different credit surveillance services. TransUnion's primary focus is on consumer data. Equifax, however, sells consumer information to both retail businesses and government agencies. Both companies offer credit monitoring for the general population.
Each one receives a free annual credit report
Call the number above or visit the website to get your annual credit report for free. The report will reach you in 15 days. It may be requested in multiple intervals or as far apart as four months apart. You will not get a complete credit report if you request it in a staggered manner. A monitoring service can be a good option. They cost between $40 and $100 each year.
All three credit bureaus can report information about your credit history, but the information might differ among them. Individual creditors don't have to report to all three credit bureaus. Some mortgage companies may report only to one or two of the three bureaus. To find discrepancies, you should check all three. This could impact your credit score.
Each has to go through a background check
A consumer can look into their credit reports to determine if someone has had a criminal record. This is a good way to prevent identity theft or fraud. These reports are useful for many purposes such as loan applications, utility deposits, etc. They include identifying information as well as a list of past and present credit accounts and payment history.
Equifax, Experian and TransUnion provide credit reports. Each bureau may have a different way to calculate your credit score. This information could also differ from one another. It is important to understand what each bureau doesn't do in order to protect yourself and maintain good credit.
Each has a VantageScore credit scoring system
FICO scores still have a lot of use, but VantageScore uses a more precise model for credit scoring. It considers factors like the type and age of credit accounts as well as past payment history. VantageScore also tracks trends and measures the credit available. It can be downloaded for free on sites such as Credit Karma.
VantageScore was first created by three of the major consumer credit reporting agencies in 2006. VantageScore 3.0 was launched in 2013. It quickly became the most widely used credit scoring model, helping over 40 million Americans to improve their scores. Although the new version, 4.0 was released in 2017, many lenders still use VantageScore 30.0 for loan approval.