How Credit Bureaus WorkPosted on September 3, 2010

Part of the credit repair process is understanding how the credit bureaus work. They serve as your reputation in a world where the banker doesn’t know you. When you understand the process, you are on your way to a higher credit score and better future.

In the United States there are hundreds of local and regional credit bureaus that gather information about your credit habits. These small bureaus are affiliated with one of the three large national credit bureaus: Equifax, Experian and TransUnion.

When you apply for a credit card, you provide the card company with your personal information such as name, address, and employer. The credit card company then contacts a Credit Reporting Agency (CRA) and reviews your credit report. If the company approves your application for a credit card, then the information you’ve supplied is forwarded to the CRA. That credit card company also reports your payment history to the CRA, so that becomes part of the report. The CRA also has access to your public records such as court records.

All of the transactions you have that involve credit are reported monthly to CRAs by the merchants or creditors you deal with. Most large creditors report this information to all three national credit bureaus (CRAs). Some smaller lenders or merchants, however, may only report the information to one. For this reason, your report from each CRA may not be the same. You might get a copy of your report from Experian that does not include an account that shows up on your report that is maintained by TransUnion. For this reason, it is wise to review copies of all three reports.

You can find the contact information for all three national credit bureaus in the United States.

Equifax
To order your report, call: 800-685-1111 or write: P.O. Box 740241, Atlanta, GA 30374-0241
To report fraud, call: 800-525-6285/ TDD: 800-255-0056 and write: P.O. Box 740241, Atlanta, GA 30374-0241

Experian
To order your report, call: 888-EXPERIAN (397-3742) or write: P.O. Box 2104, Allen, TX 75013
To report fraud, call: 888-EXPERIAN (397-3742)/ TDD: 800-972-0322 and write: P.O. Box 9532, Allen, TX 75013

TransUnion
To order your report, call: 800-916-8800 or write: P.O. Box 1000, Chester, PA 19022
To report fraud, call: 800-680-7289/ TDD: 877-553-7803 and write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634-6790

Credit bureaus do not make the call on loan approval. They simply repeat what’s been reported to them without judging whether you’re good or bad. Your lender evaluates that information to make the final call. They might use a credit score, such as the FICO credit score, to help with the decision – but it’s still the lender’s decision.

While they often get a bad rap, credit bureaus make life easier when they function correctly. They allow you to borrow from people and institutions that you’ve never met before, and they help you get better loan rates if you can show a solid history of responsible borrowing.