Credit Report Companies are Authentic Source of Credit History of Individuals
For sanctioning a loan and assessing the eligibility of a prospective borrower, most lenders depend on the credit report of the person concerned. Such credit reports are required in most cases except the payday loans. It is the credit report companies that collect and compile credit history of individuals and is the authentic source of their credit habit and history.
Functions of Credit Report Companies
Known alternatively as the credit bureaus, credit report companies collect relevant information about the credit habits and transactions concluded by the individual concerned. Compiling such information the credit bureaus create the credit report of each citizen of the country and sell them out to lenders looking for information on the credit history and score of the prospective borrower while approving loans, grants, insurances, and even employment.
Generation of Reports
Main function of the credit report companies is to generate credit reports as well as calculating the respective credit score of the individuals. Basically the reports generated have three parts. First; the company will provide details of the identification information about the client. It would contain residence, income, family details, and employment data relating to the person. Secondly; the company will offer credit history of the client including the information regarding their falling defaulter and payment habits. Last but not the least; the report generated may contain negative information that would be harmful for the prospect of the borrower like bankruptcy or tax liens.
Legal Provisions and Controlling Authority
Like all other fields the activities of the credit report companies are also regulated under the law of the land, especially the FCRA r the Federal Fair Credit Reporting Act in United States. Such companies are regulated by Government Agency name the Federal Trade Commission or FTC as well as the Comptroller of Currencies or OCC.
Major Companies
Three major credit report companies in United States are Experian with its headquarters in California, Equifax with headquarters at Atlanta in Georgia; and Trans Union with office at Chester in Pennsylvania. All these companies maintain and update the credit history and credit score of the citizen concerned and the data and information are updated on monthly basis. Ratings given by these companies are important for determining the eligibility of any client for fresh financial assistance.
Information Recorded by Companies
Information recorded by the three major credit report companies is not uniform in nature. While each of them functions as the central clearinghouse for all the credit related information, the features vary with each bureau. Besides the basic information about the consumer, credit bureaus also add new data to the existing information on monthly basis. People should be careful enough to regularly visit the credit bureau website to view their credit information and point out any discrepancy or omission in the report generated. For collection of information and data on the credit history of consumers, these companies use the services of data furnishers.
For any clarification on functioning of the credit report companies, a consumer can contact the Federal trade Commission by mail at Division of Credit Practices at Washington DC, 20580.
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