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What is a Consumer Reporting Agency?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 18 July 2014
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A consumer reporting agency is actually designed to help creditors determine whether to extend loans to borrowers (consumers). It may also be called a credit bureau or a credit reporting agency. In the US, there are three big agencies that banks and other lending companies may contact to determine the creditworthiness of a potential borrower. These are Equifax, Experian, and TransUnion. All three have access to the same information and can produce credit reports and credit scoring when requested.

Another consumer reporting agency that is recent in establishment is Pay Rent, Build Credit (PRBC). The main difference between this agency and others is that it focuses on customer reporting of timely payments, such as payments of rent, car payments and et cetera. Consumers have to enroll and do their own reporting, but it’s a completely different approach.

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The traditional consumer reporting agency focuses only on the negative, when you failed to meet credit obligations, whereas PRBC focuses on the positive by providing information about those times when you did meet your obligations on time. For some this has provided a solution, especially when they may have outstanding debt but have always paid on time and been religious about paying rent and utility bills. This is especially the case when it comes to considering potential renters, and Equifax, Experian or TransUnion reports won’t tell landlords if you’ve been a good renter, though they may inform landlords if you’ve walked out on leases or failed to pay rent. PRBC can provide details about how you handle your debt responsibly, which other consumer reporting agencies won’t provide.

As of 2003, people are entitled to request one free credit report per year from one of the big three agencies. Requesting this report can be an important step in understanding if you have any outstanding debt that needs to be paid, or if you have anything on your report that is not correct. According to some studies, there is a high incidence of mistakes on reports from consumer reporting agency organizations. Knowing what your credit report contains can be valuable if you intend to apply for a large loan, or even a small one, and you want the lowest interest rate possible.

Information held by a consumer reporting agency is gathered and reported to the agency by those people to whom you owe debt. It can include things like whether you made your payments on time, if you failed to pay a debt, whether you have claimed bankruptcy (up to 10 years after the bankruptcy was claimed), and if you have any debts in collection. Essentially almost anyone, except most private individuals, can report debt to a consumer reporting agency, especially if that debt is not being paid in accordance with agreements you signed when you contracted the debt.

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Discuss this Article

Bhutan
Post 4

SurfNturf- I will answer that for you. For accounts that have been closed due to paying off the balance, the answer is 7 years.

That is seven years from the date in which the account was actually closed. So if you are late on payments while this account was open then this data will be on your report for at least seven years.

Accounts that were in collection, also show up for seven years after the last payment was made.

As for bankruptcies, they stay on for a period of 10 years. This is why you should really be careful with your money and not file for bankruptcy unless it's a last resort. It just takes a long time for this to clear up with the 3 credit reporting agencies.

surfNturf
Post 3

Sunny27- How long can a consumer reporting agency report unfavorable information?

Sunny27
Post 2

SauteePan- It is a good idea to get every credit report every year from one of these companies. A consumer reporting agency credit report should be available for free once a year.

Should there be a credit dispute due to an unfamiliar charge, you can file a claim with the consumer credit reporting agency.

SauteePan
Post 1

The three credit bureaus are Equifax, Transunion, and Experian. These credit reporting bureaus contain your complete credit history along with your credit score.

Although the information contained in the reports are all the same, your credit score might not be the same in each of the 3 credit bureaus.

There might be a variation of 10 to 20 points within each of these credit reporting bureaus.

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