CREDIT BUREAUS

A new study has released its findings that less than 1-percent of consumer credit reports contain errors that lead to significant changes in scores. The report, which was commissioned by the three largest credit-reporting companies, said that after surveying 2,338 people the vast majority of credit reports are accurate.

Significant Reporting Errors Don’t Occur Often

By Casey Bond

By now, you’re probably well aware of how important your credit score is to your financial well-being and you do your best to carefully dodge all the potential threats to that precious number. Late payments, hard credit inquiries–you avoid them like the plague. It can be exhausting keeping up with it all, so is there anything at all that doesn’t affect your credit score or is every detail of your financial life fated to influence your credit in some way?

If you’ve looked at your TransUnion credit report and find that there is an item that appears to be incorrect, consider disputing that item. This credit bureau makes it simple to report any information that appears to be incorrect through a number of methods.

Steps you would take to dispute the item:

Step #1: Identify Inaccurate Information: Identify which item on your credit report appears to provide inaccurate information and search through your finances to verify it is truly an erroneous item.

If you’ve walked through your Equifax credit report only to notice one or more errors, it’s good to know that disputing the information is fast and easy. Whether you take on the dispute via the Internet or over the phone, by walking through the process, you can have the conduct and investigation to determine whether the information on your report is valid or not.

Online Investigation:

Consumer Reporting Agencies, or “CRAs” for short, are companies that gather and provide detailed credit information on individual consumers.

They are governed by the Fair Credit Reporting Act (FCRA) and primarily function as information clearinghouses providing credit information on borrowers to lenders, who use that information to assess the borrower’s creditworthiness and ability to repay his or her loan. Employers may also use a Consumer Reporting Agency to initiate a background check on a potential employee. Your credit score is based on the information provided in your credit report by the Consumer Reporting Agency.

Who are some consumer reporting agencies?

Your credit score is a powerful tool.  It can help you lease an apartment, buy a home or obtain an insurance policy.

Your name, birth date, social security number and employment history are all contained in your credit history. Credit bureaus have the right to sell this information in some instances and it is important to know all of the facts. While credit bureaus have the right to sell your information to some institutions, they are prohibited from selling to others.

The Fair Credit Reporting Act (FCRA) is an act of Congress that was passed into law initially in 1970, but has been amended several times since then. It is a federal law designed to protect consumers and help promote accuracy and privacy of consumer credit information, and is enforced by the Federal Trade Commission. Under the Fair Credit Reporting Act and its subsequent amendments, the creditors that supply information about you to consumer reporting agencies must follow certain regulations and restrictions. Here are some of your rights as a consumer under the FCRA:

You have the right to a complete disclosure of what is in your file.

The three credit bureaus – Experian, Equifax and Transunion – may differ in the way they format and present information, but in general, all credit reports must contain the same type of information and must exclude certain other types of information.

Basic identifying information such as your social security number and date of birth will appear on your credit report, as well as items related to your employment history such as addresses of recent employers. However, this information is not used in calculating your credit score. Items that are used include:

• Your credit accounts: These are also called “trade lines,” and are reported by your lenders. Every time you open any type of credit account, the lender will report the account type, the date the account was opened, what your credit limit is (or the loan amount), and your payment history. Your payment history will be reported every month for as long as the account is open. If your payments are 30, 60 or 90 days late, this will affect your credit score.

TransUnion is one of the three major credit bureaus that you’ll find managing your credit information as collectors and other entities report to it.

When TransUnion Started:

TransUnion got its start in 1968 as the parent company of the Union Tank Car Company. The following year it acquired the Credit Bureau of Cook County (CBCC), which manually maintained over 3 million card files of consumer information in 400 seven-drawer cabinets. Realizing that more advanced forms of storage where going to soon be necessary, the company began making vast improvements in technological storage. The way TransUnion did it was to replace accounts receivable data with automated tape-to-disc transfer, which helped dramatically to cut the storage time and cost of updating consumer files.

Expanding to the Future:

Equifax’s Background:

Equifax was founded over 100 years ago in 1898 by two brothers, Cator and Guy Woolford. Cator had already gotten his start in the credit bureau business as a grocer in Tennessee. For the local Retail Grocer’s Association, he supervised a compilation list of customers by determining their creditworthiness. After this stint, Cator decided to make credit reporting his full career.

After his decision, he got with his brother Guy who was a lawyer to work on the venture. Deciding to get started in Atlanta, they rented an office that consisted of a single room and was called Retail Credit Company in 1899. Not long after, the brothers created a book called the Merchant’s Guide, which allowed merchants and grocers to check on the credit information of consumers.