Credit bureaus assign scores and ratings to your credit history based on how often you pay your bills, what amount you owe, as well as the length of time you have been applying for credit. These scores can help lenders predict if you'll be capable of paying your bills on time. They range from 300 to 850, and a higher score indicates you make timely payments. These credit bureaus compile, synthesize, then present this information in order to lenders and other business.
Equifax, Experian, TransUnion are three of the major credit bureaus
Credit bureaus can track your credit to assess whether you are a suitable risk for lending. There are many credit agencies, but most lenders only use one or two of these three. Equifax, for example, was founded in 1899 as a retail credit company, and by the 1920s had offices across North America and credit files for millions of Americans.
Each bureau offers different credit monitoring services and has its own business model. TransUnion focuses on consumer data. Equifax sells information about consumers to government agencies and retail businesses. Both companies also offer credit monitoring services for the general public.
They all receive free annual credit reports
Call the number above or visit the website to get your annual credit report for free. Within 15 days, you will receive the report. You can also request it at multiple times or even up to 4 months apart. You will not get a complete credit report if you request it in a staggered manner. Monitoring services can be purchased for as little as $40 or more per year.
The information reported by all three credit agencies may be the same, but it could differ from one bureau to another. Individual creditors don't have to report to all three credit bureaus. Some mortgage companies may report only to one or two of the three bureaus. It is crucial to review all three bureaus to determine if there are discrepancies. This could impact your credit score.
They each have a background check
A consumer can look into their credit reports to determine if someone has had a criminal record. This is a good practice for avoiding identity theft and fraud. These reports are useful for many purposes such as loan applications, utility deposits, etc. They provide identifying information, a list past and current credit accounts, as well payment history.
Equifax, Experian and TransUnion provide credit reports. Each bureau will calculate your credit score differently, so the information you receive may be slightly different. Understanding what each bureau does not do is essential for protecting yourself and maintaining good credit.
Each of them has a VantageScore credit rating model
FICO scores can still be used widely, but VantageScore credit scoring uses more sophisticated models. It measures factors such as the age and type of credit accounts, as well as payment history. VantageScore also measures credit availability and trends. It's free to download from Credit Karma.
VantageScore is a product of three major consumer credit bureaus. It was created in 2006 and has been updated several times since then. VantageScore 3.0 was launched in 2013. It quickly rose to be the most popular credit scoring system and has helped more than 40 million Americans improve their scores. Although the new version, 4.0 was released in 2017, many lenders still use VantageScore 30.0 for loan approval.