A credit bureau is an entity that has the purpose of maintaining financial records of individuals. They research, monitor, maintain, and make available information on a person’s financial transactions, assets, and debts. This information is used specifically for credit reports and credit ratings.
In today’s credit driven societies, credit bureaus play an important role. The information that they furnish is used by lenders, banks, credit card companies, and other financial institutions to determine the risk of lending an individual money. This measure of risk is called creditworthiness. The higher the credit rating of a person, the better his creditworthiness, and the better chances that he has of getting a loan.
There are four credit bureaus in the United States today: Equifax, Experian, TransUnion, and Innovis. These four companies keep close track of all credit information available on individuals. Every year, they compile this information and have reports ready for viewing by whoever requests for a copy. Every person gets one free report request per year, while subsequent requests will be charged.
It is important to go over your credit report regularly as the credit bureaus are not exempt from making mistakes. The slightest red flag or error in your report can cost you an important loan in the future. Consumers are advised to take advantage of that one free report each year and to countercheck everything contained in it. If you do find an error, you can contest it, and if you provide the necessary documentation, you can have your credit report fixed.