In recent decades, credit has become increasingly easier to obtain. Credit cards, for example, were once issued primarily to the wealthier classes of society and used only occasionally. At the turn of the 21st century, nearly half of all Americans had at least one general-purpose credit card (ie, a Visa, MasterCard, American Express, or Discover card). The rise of credit as a common way to buy necessities, luxuries and everything in between means that credit bureaus process more information and are a more vital part of the economy as a whole than ever. Credit bureaus also track and analyze data derived from a growing number of loans for homes, cars, and other high-cost items.
Today, credit reporting agencies regularly collect information from creditors (banks, credit card issuers, mortgage companies, who specialize in lending money to homebuyers, and other companies that extend credit to individuals and businesses) and the gather in files on individual consumers and businesses. , while updating your existing files. In addition to data collected from creditors, credit files may also contain employment history, previous addresses, aliases, bankruptcy filings, and evictions. The information typically stays on a credit report for seven years before being removed.
Most local and regional consumer credit bureaus in the United States are owned or contracted by one of the three major consumer credit reporting services listed above. Each of these three companies collects and distributes information separately, and credit scores and reports differ slightly from bureau to bureau. Each company maintains around 200 million individual consumer credit files. Often a lender will use an average of the credit scores provided by the three different agencies when deciding whether or not to make a loan.
The main business credit bureau in the United States is Dun and Bradstreet. D and B has credit files on over 23 million businesses in North America and over 100 million businesses worldwide.
In addition to providing creditors with the information needed to determine an applicant’s credit qualifications, credit bureaus make your data available for more controversial purposes. For example, direct mail marketers often purchase information from credit bureaus in their search for potential customers. If you’ve ever received a letter telling you that you’ve been pre-approved for a particular credit card at a specific APR, it’s true; The credit card company already knows your credit score and, in fact, has already approved you for the specified card. Prospective employers and landlords sometimes buy credit reports as well.