Home Buddies on the Credit Bureau Secrets We All Should Know
Do you understand what the credit bureaus are for? A credit bureau, also known as a Credit Reporting Agency or Consumer Reporting Agency, is mainly a central warehouse of credit and collection records, payment history, and certain legal information about you the consumer and businesses.
The credit bureau's job is to sell (note the word sell) your credit history to lenders, banks, landlords, and even employers so they can make a decision if they want to entrust you with their money. Everyone knows the most recognized United States credit bureaus Equifax, Experian, and TransUnion, but their are a couple others you need to know. The up-and-coming new bureau is Innovis and we should never gloss over its significance to our scores. Dun and Bradstreet Corp is also extremely important because it deals exclusively with business credit information.
You can't expect to be flawless each time if you are keeping track of billions of transactions every month. The credit bureaus are simply no different. So it is up to us to keep a careful eye on the job they are doing with your financial records.
Many of us don't know that about 80% of all credit reports have mistakes. Most of these errors go unnoticed. That is because errors may only get found when you are declined for credit. However, many people just say "ok" to their score because of the psychological effect that the acceptance of one mistake in your history can cause. We tell ourselves, "Yeah, I know it's bad cause of that late payment I had." And so we just accept it.
The Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA) now set out the obligations for credit bureaus to maintain fair and accurate records which is a significant improvement. The Act tells the Bureaus how to respond to consumer complaints of inaccuracies and requires them to provide a way for consumers to view their records.
Credit reporting bureaus are still businesses that need to make profits like any other. Their profits are derived by charging banks, lenders, credit card companies or utility companies for accessing customer's data. This also means that researching your credit disputes costs them time, money, and resources to investigate.
Here is the first secret of the credit bureaus:
Depending on who requests your credit information, your score could have up to 92 unique variations. That means each of the bureaus could have potentially 23 different scores outside of your actual real score.
Your credit score will differ depending on who pulls the it and which profile has been applied to you. Typically the score you see if you request it from a major reporting bureau or an online service absolutely will be different - and usually higher than the score you get from a mortgage broker.
For example, if you apply for your credit file through an online agency you will be required to match up around 18 points of identification to verify who you are. Unfortunately when a mortgage broker requests your report, they only use around 9 elements of identification to match which allows room for more errors and subsequently may reduce your score.
It has been speculated that the credit bureaus provide these different and lower scores because if they are reporting lower scores to lenders, then they feel that they would be less likely to be sued by lenders if the borrower defaults on the loan.
Wow. So are they protecting you? Or just protecting themselves?
The credit bureau's job is to sell (note the word sell) your credit history to lenders, banks, landlords, and even employers so they can make a decision if they want to entrust you with their money. Everyone knows the most recognized United States credit bureaus Equifax, Experian, and TransUnion, but their are a couple others you need to know. The up-and-coming new bureau is Innovis and we should never gloss over its significance to our scores. Dun and Bradstreet Corp is also extremely important because it deals exclusively with business credit information.
You can't expect to be flawless each time if you are keeping track of billions of transactions every month. The credit bureaus are simply no different. So it is up to us to keep a careful eye on the job they are doing with your financial records.
Many of us don't know that about 80% of all credit reports have mistakes. Most of these errors go unnoticed. That is because errors may only get found when you are declined for credit. However, many people just say "ok" to their score because of the psychological effect that the acceptance of one mistake in your history can cause. We tell ourselves, "Yeah, I know it's bad cause of that late payment I had." And so we just accept it.
The Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA) now set out the obligations for credit bureaus to maintain fair and accurate records which is a significant improvement. The Act tells the Bureaus how to respond to consumer complaints of inaccuracies and requires them to provide a way for consumers to view their records.
Credit reporting bureaus are still businesses that need to make profits like any other. Their profits are derived by charging banks, lenders, credit card companies or utility companies for accessing customer's data. This also means that researching your credit disputes costs them time, money, and resources to investigate.
Here is the first secret of the credit bureaus:
Depending on who requests your credit information, your score could have up to 92 unique variations. That means each of the bureaus could have potentially 23 different scores outside of your actual real score.
Your credit score will differ depending on who pulls the it and which profile has been applied to you. Typically the score you see if you request it from a major reporting bureau or an online service absolutely will be different - and usually higher than the score you get from a mortgage broker.
For example, if you apply for your credit file through an online agency you will be required to match up around 18 points of identification to verify who you are. Unfortunately when a mortgage broker requests your report, they only use around 9 elements of identification to match which allows room for more errors and subsequently may reduce your score.
It has been speculated that the credit bureaus provide these different and lower scores because if they are reporting lower scores to lenders, then they feel that they would be less likely to be sued by lenders if the borrower defaults on the loan.
Wow. So are they protecting you? Or just protecting themselves?
About the Author:
Home Buddies gives lectures on real estate investor credit repair in Houston. Beginning with a free session for site visitors, Home Buddies develops and implements a custom strategy to boost credit and creates a business development strategy to help real estate investors or homeowners overcome problems to financing real estate and building a portfolio.
posted by Debt Consolidation Loan at
8:09 AM
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