Knowing how to monitor and manage your credit report might be confusing at first, especially since you won’t know where to start. You might have also heard about credit bureaus and how checking your credit report is essential. But what does this mean?
Most people are unaware that they have multiple credit reports. And even if they know, they might not be informed that each credit agency might have different yet similar information as the others. Credit reports come from a vast range of perplexing sources, but they are dominated by the three major credit bureaus, namely: TransUnion, Equifax, and Experian.
So, which credit report should you request?
There’s no best agency’ or best credit report to request. The probable differences and distinct merits of these various reports from each other are the main reason why you should request all your credit reports from these three agencies. Moreover, it also provides you with a more comprehensive understanding and overview of your credit report.
This article will delve into how checking all three of your credit reports is ultimately the right move, alongside essential information about the three credit bureaus.
A credit report typically includes personal information for identification purposes. Some of these include your list of credit accounts and their current status, type of account (auto loan, credit card, or mortgage, etc.), as well as your history of payment on these accounts.
Credit Reports are important since the information on them is utilized to determine your credit score.
A good credit score may be your ticket to acquiring brand new opportunities and even having better finances. For instance, your credit score can significantly impact the likelihood of you getting approved for a credit card, mortgage, car loan, or personal loan.
Similarly, higher credit scores mean you have more chances of getting lower interest rates and loan terms, saving you thousands or hundreds on loans alone. It’s also vital even in matters not related to finances, such as job or rent applications.
Credit agencies are the ones that compile credit scores and reports about borrowers, mainly for lenders and governments. In a nutshell, they’re the ones responsible for handling an individual consumer’s creditworthiness.
These three bureaus analyze and package credit reports from which credit scores are derived. These credit scores are often released as three-digit numbers, mainly ranging between 300 to 850, and they affect the size or terms of the loan that you can be eligible for, as well as the interest rates you’re bound to pay.
In some cases, they can also affect your opportunities for employment or rent.
These are private agencies that are entirely regulated or operated under the Fair Credit Reporting Act. That said, they are often limited in how they disclose, collect, or disburse the information of consumers.
While there was an overwhelming amount of credit bureaus out there, over time most have consolidated. Now only three remain to be of major significance. These are TransUnion, Equifax, and Experian. These big three are the ones that dominate the market for disbursing, analyzing, and collecting consumer information in the credit markets.
Historically, credit scores used to depend on the FICO score linked with the Fair Isaac Corporation, which is a data-analytic company. While it’s still possible for you to obtain a FICO score from any of these three major agencies, their calculation methods largely differ. Because of this, checking your credit reports from all three proves to be the most comprehensive and efficient way to go.
Here is some important and brief information about the major credit bureaus. You can then decide which credit report you should request.
This company markets itself as an insights and global information services firm where trust is readily attained. Based in Chicago, TransUnion has plenty of regional offices in the U.K, Canada, Hong Kong, Colombia, South Africa, Brazil, and India, with over 8,000 employees.
Equifax is an Atlanta-based company with roughly 11,000 employees and operates in over 24 countries. Some of these are Saudi Arabia, Chile, Canada, the U.S., the UK, Peru, Australia, Russia, Cambodia, Singapore, and Mexico, among many others. Equifax is particularly dominant in the Midwest and the U.S. South, claiming to be a leading company in the market of most countries where its presence is known.
This credit bureau originally dealt with credit reports for the Western part of the United States. Headquartered in Costa Mesa, California, the company promotes itself as a top global information services agency with over 17 000 employees in 37 countries. It also has its operational headquarters located in Sao Paulo, Brazil, and Nottingham, UK, and corporate headquarters in Dublin, Ireland.
All three credit agencies mentioned above collect similar kinds of consumer information, including personal data, credit history, and credit application activity. For credit bureaus, it’s common practice to gather information from private and federal student loans as well as housing lenders.
Even so, these credit agencies slightly differ in terms of commercial focus. One agency may opt to focus on foreign creditors while one monitors business credit data. But for purposes related to American consumers, the CRAs can be interchangeable.
Federal law typically mandates all three to work and function together, especially on identity theft issues, alongside the obligation to release yearly credit reports to the consumer.
Moreover, the three credit reports vary in one essential way through inquiries. Inquiries from different lenders or creditors. This particular difference can be to your advantage. Since some collectors or creditors only report to only one or two bureaus, there are tendencies where some items are disputed on one report but are nonetheless verified on another.
This kind of variation typically means a huge credit score difference from one bureau to another. Because of this, if you experience being denied credit based on a single bad credit score but have better ones with another agency, you still have luck asking for inquiries and requesting your better score to be considered instead.
As for which credit report should you request? All three bureau reports hold a significant sense of value. Thus, no one can be fairly considered better than another in measure. The good thing about this is that all three agencies constantly strive to sustain accurate data. However, the downside is that since they serve millions and millions of consumers, it’s virtually impossible to receive personalized customer handling and services.