Where Do Credit Reports Come From?

Having a credit report is really protecting you and also proving yourself to be a trustworthy person. First, we need to know, where do credit reports come from? There are credit reporting agencies, otherwise known as CRAs, who have the task of tracking, gathering, and presenting your credit history to someone who requests it. There are three major companies here in the United States of America. They are:

Experian (formerly known as TRW)
Equifax Inc; and
TransUnion

These three companies hold over 500 million credit holders' records worldwide.

As soon as you started using credit as a college student perhaps, a file was created in your name within one of the CRAs' massive databases, storing and continually collecting your credit use. They also started generating a credit "ranking" or "score" for you, of which you have probably heard, which is based on every other American's use of credit. You can either have an excellent, average to good, poor, or no credit standing. The closer your report is to excellent, the better advantage you have. So if you have ever applied for a mortgage, car loan, or another large loan, you can almost be certain that one of those three large companies was contacted and then provided this information.

Why is this credit report information even important to these companies? The more you feel you can trust someone, the greater the chance will be that you will loan him or her money e. If you have a brother who just never seems to be able to pay you back, chances are you will tell him you will not be able to lend him money. The opposite is true if you have a very trustworthy friend who always is able to pay you back on time. Banks and financial institutions do not personally know you, or how good you are at paying back your debts, so they must enlist the help of a CRA to let them know if you are dependable and responsible with your credit.

You may also want to check out your credit report from time to time, just to be sure that there are no errors or little unknown activities in it. Companies make mistakes, especially when dealing with 500 million accounts. If you do find an error, write a courteous letter to the company disputing the information contained in the report. The information may also be incorrect due to fraudulent activity, for which you should not be accountable.

Source by Laura Palmieri

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