subject: Understanding Credit Reporting Agencies: What are They and How Do They Work? [print this page] Understanding Credit Reporting Agencies: What are They and How Do They Work?
People who have kept a close eye on their financial state may already know about credit reporting agencies and how they work. It is necessary for you to understand their job because they play a big part in dealing with your credit history. Also called as credit bureaus, they work hand in hand with companies and financial institutions to keep track of everybody's credit reports. This information is mostly used to tell if you are legible for mortgages and other types of loans. They would even affect the interests of your credit card and other debts.
You can say that credit reporting agencies do hold a strong power in your finances. Unfortunately due to human failure, there are some cases when erroneous data will be placed in your credit history. If you fail to check these errors instantly, you may not know that you are already in trouble. Though you can always clarify and dispute these mistakes, you can only do so if you know they are there. As most experts would tell you, it is important for you to check and study credit reports once or twice a year.
Though the reports from credit reporting agencies can help keep you from obtaining a loan, it is also a handy way to make sure that you are maintaining good credit and that you are in a stable financial ground. You just have to make sure that you know what your exact rights are and exercise them so that you can use the credit reporting agencies to your advantage. One of the biggest things you should know is your right to obtain free reports once a year or if you are going to be denied of a loan because of their data. All agencies are also required to clear any disputes for you if ever there is an erroneous entry in the whole report.
Keep in mind that though there are many credit reporting agencies around the country, there are currently three biggest agencies you should keep your eye on. Their scopes are large so their data are comprehensive most of the time. They are also mostly used by most lending companies so as much as possible, you want to make sure that your records are clean.
