In the United States, a credit bureau can is also called a "consumer reporting agency". These bureaus collect data over your bill paying history, especially in regard to loans and credit lines, and sell that information to aid companies with loan-granting decisions.
What Does a Credit Bureau Do?
For businesses, these bureaus provide information that helps them more securely decide which consumers to loan money by providing information on consumer credit and financial history. For consumers, a credit bureau can assist with loan-approval, or it can offer advice on improving credit before applying for a mortgage, car financing, or other loan.
How Do Credit Bureaus Assist Consumers?
Even though credit bureaus make most of their money from selling your credit data to prospective creditors, they can still help you.
Credit bureaus relay your FICO score, which stand for Fair Isaac Corporation, to potential lenders. This score allows lenders to determine if you will be a reliable lendee. You can also request your credit score from a credit bureau for your own reference. If you get your credit report from a bureau and find an error, that bureau will assist you by correcting your report and updating your credit score.
Credit bureaus also offer credit monitoring services. For a fee you can get regular updates on your score, alerts about any negative reporting from creditors, and receive your credit report multiple times per year. This is beneficial to maintaining and improving your credit score.
What Are the Major Credit Bureaus?
In the U.S., there are three main credit bureaus. Alphabetically, those are Equifax, Experian, and TransUnion. These three credit bureaus are considered the "major consumer reporting agencies" and offer free services for consumers.
For example, the federally mandated website AnnualCreditReport.com is a free service that allows you to acquire annual credit reports. By law, every U.S. citizen is entitled to one free annual credit report from each of the three major bureaus. AnnualCreditReport.com is the easiest way to access these reports.
Essentially, credit bureaus are the middle man between lenders and lendees. They relay credit score information to both consumers and potential lenders so both parties can make the proper financial decisions.
