The other name for credit reporting agencies is the reporting bureaus. Credit reporting agencies collect information about your historical borrowing and repayment data and sell credit reports. The 3 credit reporting agencies are Equifax, Experian, and TransUnion.
3 Credit Reporting Agencies
As a company that was started in 1899, Equifax takes pride as a company that helps people live their financial best. With the headquarters of this company based in Atlanta, it operates in 24 countries worldwide and has employed 14,000 people.
This credit reporting agency puts customers’ work in everything it does in its business. The company offers a monthly free credit score for its customers, which you can take advantage of. Equifax relies on the FICO scoring model to gather data on your credit scores whenever you ask for reports.
Experian is quite a young credit reporting agency that started in 1996. This company calculates your credit score based on the FICO® Score 8 model. Despite being young in the industry, this company has grown immensely to surpass Equifax. The company directly employs 16,000 people in its 39 countries of operation.
You can get a free credit report from Experian before you apply for a loan or a credit facility. Suppose your credit score is not as good when you want to apply for a loan. In that case, Experian helps you to raise your credit score using utility bills, telephone bills, and any other eligible rental remittance.
TransUnion is another credit reporting agency from the United States with a global reach. As of 2023, the company operates in 30 countries, and its headquarters are in Chicago, Illinois, United States.
You can get a free weekly credit report from TransUnion. TransUnion also has a paid subscription plan for you if you want more advanced credit monitoring services. Whether free annual credit reports or premium subscription credit monitoring, TransUnion’s reports are quite comprehensive to help you understand your financial health.
What Do Credit Reporting Agencies Do?
A credit reporting agency does beyond what you probably think. These are firms in business; providing you with your updated credit report is just one business area in their portfolio.
The answer to what credit reporting agencies do depends on whom these firms are interacting with.
a. Interaction with individuals
The core services that credit reporting agencies offer to individuals are their credit scores and reports. These are crucial to individuals, the majority of whom are looking to monitor their financial health.
In other cases where a reporting agency is interacting with individuals, they could be helping them resolve disputes about errors and misrepresenting their financial records in credit reports.
Credit reporting agencies also provide identity protection to individuals. These are customized services offered to individuals who wish to get alerts about suspicious activities through their credit cards and other banking facilities.
b. Interaction with businesses
In cases where a credit reporting agency interacts with a lender or creditor, the nature of their services changes slightly. For instance, credit reporting agencies provide businesses with credit reports of potential borrowers to determine their creditworthiness.
Credit reporting agencies also play a significant role in helping prevent lenders from being used to facilitate fraud. This is possible by helping to confirm the identity of loan applicants and avoid any fraudulent loan or credit application by a compromised identity.
Risk management is yet another service that businesses get from credit reporting agencies. Before lenders and creditors give out their money to their borrowers, they go hand in hand with credit reporting agencies to determine loan terms, credit limits, and best interest rates per borrower dependent on their credit history.
How Often Should You Check Your Credit Report?
Some people may tend to check their credit report a couple of times a year, while others may not bother to check their credit report at all. Checking your credit report at least once a year is the minimum you should be looking for.
In such regular checks of your credit report, you can identify changes you never anticipated and how they would have affected your credit report. If you dispute any unanticipated changes, you can launch a despite if you feel some of your credit report entries are misreported.
How to Get Rid of Late Payments On Credit Report?
Getting rid of a late payment on a credit report is only possible if it’s an error. Here, you can raise a dispute for necessary corrections to be made in your credit report. However, a credit reporting agency will not manipulate your credit report to remove a late payment that is not an error but accurate information of a payment you were late to remit.
How Long Does a Hard Inquiry Stay On Your Credit Report?
A hard inquiry is a record of a request by a lender to review your historical credit record during your past loan application. If you have a hard inquiry on your credit report, it will be on your credit report for two years. However, such hard inquiries only affect your eligibility for loans and credit facilities in the short term, majorly not exceeding one year.