Credit can help us get the things we need and want. For most of us, credit is required to buy a home or car. We can also use it to buy everything from vacations to groceries. And increasingly, our ability to rent an apartment or get a new job hinges on our credit.
Our credit files are maintained by credit reporting agencies, also known as credit bureaus. In the United States, there are three agencies that keep track of everyone’s credit: TransUnion, Experian and Equifax. Creditors use information provided by these agencies to determine a borrower’s creditworthiness.
What Kind of Information Do Credit Reporting Agencies Keep?
Credit reporting agencies maintain a file on each person who has obtained credit. This file includes personal information such as the person’s name, address and phone number, as well as his Social Security Number. It also includes a list of accounts that have been obtained under that name, as well as the amount borrowed and payment history associated with those accounts.
The agencies get this information directly from lenders. Most report to all three agencies, letting them know if you have made your payments on time. If you haven’t, they report how late your payments were and whether any collection action was taken.
Credit reporting agencies also have access to public records. That means that they can find out if you have had any judgments against you, or if you have filed bankruptcy. This information, if applicable, is added to your credit report. The agencies do not, however, list any information pertaining to driving or criminal records.
Who Can Access Credit Reports?
Credit reporting agencies are required by law to only release credit reports to companies that have a legitimate need for a person’s credit history. These include lenders, employers, landlords, insurers, and in certain cases, government agencies. The average person cannot legally access someone else’s credit report.
You can, however, access your own credit report. By law, each individual is entitled to a free copy of his credit report from each of the three credit reporting agencies each year. In addition to this, you may also request a copy from the agency used by a creditor who denies you credit within 90 days of being turned down. You may request a copy of your report in writing or online, but you must provide identifying information to prove that you are who you say you are.
If you find information on your credit report with which you disagree, you can dispute it. The agency will investigate your claim, and if it finds that the information is erroneous, it will remove it from your report. If it maintains that the information is true, you can place a note with that information that must be passed on to anyone who views your credit report.
Credit reporting agencies simply pass on information obtained from creditors. They do not determine whether or not we can obtain new credit. They do, however, give lenders the information they need to make that decision for themselves.