Credit Bureau — What Is a Credit Reporting Agency?

What is a Credit Bureau?

A credit bureau (or credit reporting agency) is a company that collects and maintains individual credit information and sells it to lenders, employers, and other businesses. The three major credit bureaus in the US are Experian, Equifax, and TransUnion.

How Credit Bureaus Work

Banks, credit card companies, and other lenders report information about:

• Granted loans and credit cards
• Payment history (month by month)
• Current balances and credit utilization
• Closed accounts and their payment history

When you apply for credit, lenders request your credit report and score to assess your creditworthiness.

Credit Score

Credit scores typically range from 300 to 850, with higher scores indicating lower credit risk. FICO and VantageScore are the most common scoring models.

Credit scores consider:

• Payment history (35% - most important factor)
• Credit utilization (30%)
• Length of credit history (15%)
• Credit mix (10%)
• New credit inquiries (10%)

What Credit Bureaus DON'T Track

Credit bureaus don't collect information about:

• Bank account balances
• Income or salary
• Assets like real estate or investments
• Debit card transactions
• Utility payments (unless delinquent and sent to collections)

How to Get Your Credit Report

In the US, you're entitled to one free credit report annually from each bureau at AnnualCreditReport.com. Many credit card companies also provide free credit scores to customers.

Credit Bureau vs Collection Agency

Credit bureaus maintain credit histories; collection agencies pursue unpaid debts. However, collection accounts can appear on credit reports and significantly impact credit scores.

How Freenance can help

Freenance helps track all your obligations and reminds you of payment due dates, which translates to better credit scores. Regular monitoring of expenses and payments in one place minimizes the risk of missing deadlines.

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