Bad Credit Medics

You must have wondered as to why there are credit rating agencies. But in all probability it could be when you are going through a rough patch only. The credit rating agencies and bureaus are legally established corporations that are actively being traded on the bourses. They are not just there for consumer credit rating but for commercial ratings too, so that the investors and creditors can decide about their investment positions with a corporation.

But how do credit bureaus do all this? Let us, for now concentrate on the three big consumer credit agencies in our quest to understand them better.
1. Equifax Incorporated
2. TransUnion Incorporated
3. Experian Incorporated

The CRA (credit rating agencies) collect, bring to order and manage all types of financial, credit, marketing and demographic information regarding individuals regardless of whether they have availed credit or not. Individual consumers are identified by their mailing addresses and Social Security Numbers.

All CRAs receive data about thousands of individuals, day in and day out. This data is stored in a data base, ‘as is.’ The information they provide on your credit report is not ‘manipulated’ or adjusted in any way, but for presenting in an organized manner for ease of understanding.

If data is presented ‘as is’, doesn’t it mean unchecked errors could creep into my report?

It is very rarely that reported data are contested by individuals on a large scale for inaccuracies. Also, the inaccuracies could just be the outdated information, or a misreported one, which can be corrected. It is the duty of CRA to verify data and correct the report within a time frame of 30-45 days after receiving disputes. And till such time, they reflect the point you disputed, with a remark. You are entitled to get a free report if you win the dispute.

Well, the CRAs are governed by the Federal Trade Commission’s guidelines and the Federal Laws. They can’t ignore the written disputes you may raise about your credit report. They will represent the facts of their investigations in their next report. They are also bound by law to provide one report free to all individuals in a year and in case an error is corrected. You can also buy a report whenever you need one. The credit information is guarded by privacy policy and only your financial history is disclosed to those who pay for it. Your personal information is kept protected.

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