Back to Blog
15 May

Credit Bureaus


Posted by: Gurmit Singh

Written by Gurmit Singh

Credit bureaus say they usually need to check with the lender because 30 percent of disputes are filed by shady credit-repair companies that challenge all the negative information on a consumer’s report, regardless of its validity. To sort the good from the bad, the industry sends almost everything through the automated system e-OSCAR (Electronic Online Solution for Complete and Accurate Reporting), which forwards consumer disputes to lenders for verification. They use the information in your credit report to determine your credit rating on the day it’s requested. Your credit score is important because most lenders will use it to automatically judge if you’re a good credit risk. They can release your information only to people with a legitimate business need. In addition, lenders and insurers may use in your credit file as a basis for sending you unsolicited offers.

They don’t have to report your credit limit if the creditor doesn’t tell them. And creditors often don’t tell because they want to prevent competitors from identifying and stealing their high-limit customers. They may be private enterprises or may be operated on a cooperative basis by the merchants in one locality. Users of the service pay a fee and receive information from various sources, including businesses that have granted the customer credit in the past, public records, newspapers, the customer’s employment record, and direct investigation. They compile and sell
your credit report to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it’s important that the information in your report is complete and accurate.

Credit bureaus and their hirelings often inadequately match
public records before adding the info to credit reports. Some other John Smith filed for bankruptcy– but it wasn’t you.

Information about your checking or savings accounts is not included on
your credit report. Information that is available in
public records, such as court judgments, foreclosures and seizures may also make up part of your file. Information on Free Advice or a Forum should not be relied upon and is not a substitute for advice from an attorney licensed in your jurisdiction who you have retained to represent you.

Report such attempts to government regulators immediately. Report your identity theft to your local police or sheriff’s department, making sure your police report lists all the fraudulent accounts. Of course, get a copy of the report.

Check with your service provider for their fraud hotline number. In addition, you may want to ask your telephone service provider to implement a “carrier freeze”. Check in the yellow pages for mailers near you. To track down a specific mailer, check the fine print on material mailed to you. Checking your report periodically you will prevent different problems, such as identity theft. Moreover, monitoring
your credit report and score regularly gives you more opportunities to attain good credit history.

Consumer advocacy groups recommend reviewing a copy of
your credit report at least once per year. When you are prepared to explain blotches on your credit history, you are more likely to have credit extended to you. The most common type of CRA is the credit bureau. Consumer advocates have picked up on it and made some strong efforts to get the truth out and stop the spread of this incomplete and misleading chain letter.

Consumer advocates recommend that you do not do this. If you take action quickly, the companies with which the fraudulent charges were made or fraudulent accounts were opened should work with you to limit your responsibility for the debts and permanent effects on your credit. Consumers can obtain their FICO
credit score, for a fee, at

They are permitted by law to report bankruptcies for 10 years and other negative information for 7 years. There is nothing that you (or anyone else) can do to require a
credit bureau to remove accurate information from your credit file until the reporting period has expired. They are a function of the big banks and should be not allowed to operate. The 4th Amendment protects Americans from keeping any kind of data files on them. They are required to do this and when someone pulls your report they are obligated by law to disregard that item. If you ask, the consumer reporting company must send notices to anyone who received your report within the last 6 months AND you can have a corrected copy of your report sent to anyone who received a copy during the last 2 years for employment purposes.

They are businesses that collect information on the payment habits and current debt of individuals. They gather this information from financial institutions and others sources (such as utility companies, retailers, consumer creditors, tax authorities, governments, etc.) and organize it in a database. They are in the business of making money. They make money this by selling the information they have regarding your financial life and habits.

Scores over 750 are considered excellent, while those below 620 are risky. Your FICO score can differ from one company to another by as much as 100 points. Scores reflect payment patterns, with more emphasis placed on recent activity. By paying bills on time, keeping balances low (particularly in relation to the account limit), and only applying for and opening new accounts as needed, you can increase your score over time. Scores generally range from 300 to 850, with higher numbers indicating a lower risk. As your credit activity changes, so does your score.

Financial institutions often request FICO, Beacon, or Empirica
credit score as part of the report. The score is a statistically-proven weighting of items in the report, boiling it down to a single a number to simplify decisions about credit-worthiness or the likelihood of bankruptcy. Financial institutions have great incentive to pay close attention to the list. Criminal penalties for violating the SDN list provisions under the Executive Orders range up to 10 years in prison, $500,000 in corporate fines and $250,000 in individual fines. Financial institutions were required to send notices to existing customers by July 1, 2001. Thereafter, new customers also will get privacy notices, and all customers will receive a notice annually.

Financial decisions are personal, based on an individual’s situation. Consult with a financial professional before making any financial decisions.

Free copies of the reports were only available to consumers who were turned down for credit or were victims of identity theft. As of March 1, 2005, the three major nationwide credit bureaus are required by the Fair and Accurate Credit Transactions Act to give all Minnesota consumers a free annual report.

FICO scores are the credit scores most lenders and financial institutions use to determine your credit risk. Each score is based on information the
credit bureau keeps on file about you. FICO scores vary from approximately 375 to 900 points. Higher scores are better. To get the best interest rates, you will generally need to score 680 or higher.

Send it certified mail. The
credit bureau must correct any errors in the report. Send a letter to the creditor, or other information provider. Follow the same guidelines from Step 1 (letter to the
credit bureau).Know that many creditors have a specific address for disputes. Send the letter by registered mail and ask for a return receipt. Allow at least 40 days for any action and then recheck
your credit report.

TransUnion, Experian, and Equifax are the three major US credit bureaus (sometimes called credit reporting 

agencies). Each of them compiles and stores the personal and financial information on an estimated 205 million Americans. TransUnion will also send you a form to fill out (Equifax does not send a form.) The purpose of the form is to provide formal authorization to TransUnion to place an “alert” message on your file. Complete and return this form as soon as possible.

Identity theft has become a $50 billion business, bilking both consumers and companies alike. Your credit report contains information about your past and present credit transactions. Identity theft can impact you as an insurance consumer because insurers often use an individual’s credit score to determine whether to accept an applicant for insurance and to set an individual’s rates. The Texas Insurance Code, however, requires companies selling personal lines of insurance to make reasonable exceptions upon request to rates, rating classifications, and underwriting rules for an applicant or policyholder whose credit information has been directly influenced by a catastrophic illness or injury; by the death of a spouse, child, or parent; by temporary loss of employment; by divorce; or by identity theft. Identity theft is on the rise. The Federal Trade Commission reports that in 2005 Florida ranked number six in the nation for instances of identity theft.

Alternative credit bureaus are trying to fill this hole. In fact it is said that there are millions of businesses and consumers who are not part of the traditional credit bureaus. Alternative credit bureaus also calculate credit scores using their own financial models based on the bill-paying information. These alternative credit scores use the same data and criteria that traditional credit scores use, but simply apply it to non-credit-reporting bills.

Thank you for taking your time to read this article. Information shared here does not constitute financial, legal, or other professional advice. This article is intended to provide general information only and does not give advice which relates to your individual circumstances.