Credit Bureaus
What Are Credit Bureaus?
Credit is borrowed money. The consumer borrows money by using a credit card or getting a loan from a bank. When you enter such a contract with a lender, you promise to repay the money. Credit bureaus are clearing houses that record your credit history for use by legally authorized persons.
Organizations that have loaned you money in some form in turn report your payment history to credit bureaus. These bureaus then gather this payment history from all your creditors, gather information from public records, and gather your personal information. All these details are assembled into a file that is the basis for a credit check or credit report.
Credit Bureaus Do Not Grant Credit
There are over 1,000 local and regional credit bureau offices across the United States. However, most of them are owned or are under contract to the big three credit bureaus: Experian, Equifax, and TransUnion. These national and international agencies maintain credit files on millions of Americans and generate millions of credit reports every year.
Each creditor, such as a bank, or credit card company, establishes its own credit criteria. Credit bureaus compile the information about the consumer, and score the credit information. They are not involved in whether or not you, the consumer, will be allowed to open an account with a business, or get a loan to buy a new car.
