What are the Responsibilities of the Credit Bureaus?

What are the Responsibilities of the Credit Bureaus

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Copyright (c) 2010 Suzy VanstrusenMost of us know that the three major credit bureaus are Experian, Equifax and TransUnion. But do you know what special services and functions these firms perform? Most consumers are not aware of the responsibilities of the credit bureaus.So would you like to know more about the three credit bureaus and the important things they do? Then we suggest that you read the rest of this short article.What Credit Reporting Agencies Do?Note that these three credit bureaus are not only providing us a copy of our credit report. These credit reporting firms are also responsible in the collection and management of the records of all credit consumers. The three credit reporting agencies are actually the only offices accredited by the federal government to compile credit information of all borrowers and issue copies of credit files to authorized parties such as banking and lending firms.Now what the the important functions that the three credit reporting bureaus perform? They are the following:1. Collection and Updating of Credit Information - Credit reporting firms are the only institutions authorized to gather personal and contact details as well as the credit activities of consumers. They collect identification details, employment history, and payment records of different borrowers. Not only that. They also gather the inquiries made on a consumer's credit profile as well as public record information such as bankruptcy, tax liens, foreclosure and other court judgments.Another responsibility of the three credit bureaus is to always make sure that credit records of consumers are always updated. They monitor the activities of individuals like employment and residence transfers, opening and closing of credit accounts and other credit-related activities.2. Generation of Credit Ratings. The thee credit reporting firms employ their own means of computing for the credit score of consumers. Still, most of them use custom software that calculates the credit risk involved in allowing a borrower assume a credit account. This computation is generally based on the manner by which the individual actually managed his previous credit lines.3. Provision of Credit Information to Financial Firms. The credit bureaus are also tasked to issue credit information to authorized parties, such as banks and credit organizations. Why is this considered as an essential function?Well, lenders often use the credit information they get from the credit reporting agencies in evaluating the merits of the credit applications of their borrowers. They also use consumer credit details in coming up with the interest rate, payment terms, fees and charges that they will impose on the credit programs they will offer to their respective borrowers. It is thus important for them to be provided with accurate credit information of their applicants so that they can properly assess whether or not they will extend credit lines to their prospective borrowers.4. Responding to Disputes from Credit Consumers. In addition to this, the three credit bureaus are being ordered by the federal law to respond to disputes filed by consumers. Upon receiving a complaint, the agencies must immediately perform thorough reviews of the credit records of the individual and make the necessary changes on the consumer's credit report.Yes, the three credit reporting agencies do perform critical activities that have great impact on our credit prospects. But that is not all. These firms also assist and advice us of ways to improve our credit scores. How is this possible? This is through the provision of consumer credit reports.Once we get hold of our reports, we can now decide whether we need to enroll in a free credit repair service. After all, credit repair sessions provide us with useful tips and advice on how we can manage our credit accounts and finances wisely. The free credit repair services offered by non-profit organizations also give us practical suggestions on how we can avoid falling into debt traps and inflicting severe damage to our credit history. We can surely improve our credit ratings and eventually rebuild our damaged credit history if we will just follow the advice and assistance we get from free credit repair services.

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