Credit Bureaus
Who are they?There may be several small credit reporting businesses in your area, but the ones that they all report to are the "Big Three", which are:Experian Equifax Transunion What do they do?Basically, they are information brokers. The "Big Three" Collect data from thousands of sources. They maintain credit files on everyone who has ever purchased anything on credit. They then sell purchasing and payment history information to just abount anyone who wants to buy it. This is a lot of information to process properly.Are they governed by law?Indeed they are. The Fair Credit Reporting Act (FCRA) is the federal law that governs how credit information is collected, distributed, reported and corrected in case of errors. You are entitled to a free copy of the law from any Federal Trade Commission office.How accurate are they?Let's See ..., 3 credit reporting agencies, employing thousands of data entry clerks, entering billions of items of credit data. Personal data as well as credit and public record information. Obviously, with all of this going on there is tremendous margin for error. |
What is a Credit Score
Credit scores, also referred to as FICO scores are based on the information in your credi report.
Over the last twenty years, increasingly sophisticated models have been developed to calculate scores.
These models have been built using a sampling of many consumers to determine which areas
of the credit report are most indivative of credit risk. Entering the information from your
credit report into these models produces your credit score. There are many types of models used currently
for 'credit' scores, as well as other models for such areas as 'insurance' scores. All scores, however,
are based on the information in your credit report, and reflect similar degrees of risk. |
