The Role of Credit Reporting Agencies
You might have heard of credit reporting agencies, but aren't exactly sure of what they do or their purpose in the world of finance.
Credit reporting agencies keep track of the credit history of individuals. They maintain reports on credit ratings of individuals and provide such information to potential creditors.
The credit rating information of credit reporting agencies may be required by potential lenders. Landlords may request credit rating of a potential tenant from credit reporting agencies. Even insurance companies seek credit rating of clients from credit reporting agencies.
What Are Credit Reporting Agencies?
Credit reporting agencies are also referred to as the credit bureaus. You can refer to credit reporting agencies in order to check on your credit history. The information maintained by the credit reporting agencies on your credit history and credit ratings can affect many aspects in your life including getting loans approved from a bank or obtaining a health insurance.
Credit scores maintained by credit reporting agencies can determine the financial situation of an individual.
Credit Report Compilation
These credit reporting agencies could compile different credit reports on your credit history. It is important to seek your credit history and scores from all reputed credit reporting agencies.
You are entitled to receive a credit report from credit reporting agencies if you are denied a loan. There could be negative information found on your credit report as issued by the credit reporting agencies, which will lead to a loan being denied to you. You need to validate the information received from the credit reporting agencies and notify them if there is any information that is wrong or false.
How Credit Ratings Are Determined
When the credit history and credit scores are low on your report received from the credit reporting agencies, you need to take steps to rectify the situation. You need to work on money management skills in order to improve the credit score received from the credit reporting agencies.
Paying bills on time and keeping the balances low on the credit card are ways to receive a favorable rating. Credit reporting agencies collect information on your debts, credit inquiries, payment history, types of credit and so forth.