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What is a Credit Bureau?


   Experian   Equifax  TransUnionInnovisPRBC

What is a Credit Bureau?

A Credit Bureau is a company that collects information from various sources and provides consumer credit information on individual consumers for a variety of uses. It is an organization providing information on individuals’ borrowing and bill-paying habits.

What is a Furnisher?

Furnishers are creditors, lenders, utilities, debt collection agencies, and the courts (i.e. public records) that a consumer has had a relationship or experience with. Data furnishers report their payment experience with the consumer to the credit bureaus.

What Laws govern the Credit Bureaus and Furnishers?

The Fair Credit Reporting Act (FCRA), Fair and Accurate Credit Transactions Act (FACTA), and Fair Credit Billing Act (FCBA), govern and hold the Credit Bureaus accountable.

Who regulates the Credit Bureaus and Furnishers?

The oversight of the credit bureaus and those that furnish data to them are handled by two government entities. The Federal Trade Commission (FTC) has oversight for the consumer credit bureaus. The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks with regard to the data they furnish credit bureaus.

Who are the Credit Bureaus?

Most consumer credit information is collected and kept by the four major national credit reporting agencies: Experian (formerly TRW Information Systems & Services and the CCN Group), Equifax, TransUnion, and Innovis (which was purchased from First Data Corporation in 1999 by CBC Companies).

These organizations are for-profit businesses and possess no government affiliation. Though they are competitors, they have formed a trade organization called the Consumer Data Industry Association (CDIA) to establish reporting standards and lobby on behalf of their industry issues in Washington.

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Are there any other Credit Bureaus?

There are dozens of other similar information collection and reporting firms (credit bureaus) that analyze and sell information about consumers for other purposes, including those who aggregate multiple credit data sources and provide lenders with customized analytical tools.

PRBC (Payment Reporting Builds Credit, Inc.) is a national alternative credit bureau. Incorporated in March 2002, PRBC enables consumers to self-enroll and build a positive credit file by reporting their on-time payments (such as rent, utilities, cable, and phone) that are not automatically reported to the three traditional credit bureaus.

Incorrect information on your credit report

In the United States, 90% of credit reports provided by credit bureaus contain inaccuracies. According to the U.S. General Accounting Office (GAO), common causes of errors broadly fall into one of two categories: inclusion of incorrect information and exclusion of correct information.

Where does the incorrect info come from?

The reasons for the inaccuracies include consumers providing inaccurate information to the credit bureaus; incorrect or incomplete data input by furnishers, or failing to provide data to the credit bureau; and incorrect or incomplete data (or data applied to the wrong consumer) by the credit bureau. According to Credit Report Accuracy and Access to Credit, “the parties that bear the costs of correcting errors or providing more timely and complete information [data furnishers and credit bureaus] may not receive much benefit from the improvement in accuracy.” This means that it’s more cost effective for the credit bureaus to report incorrect information than to investigate a credit file and correct the data.

Are all credit reports maintained the same way?

No. The credit bureaus also maintain a VIP database of special consumers such as members of Congress, judges, actors and celebrities. The VIP database is specially administered by the bureau, which ensures the credit report of the consumer is accurate and not negatively handled. The database exists because individuals in the VIP database could cause significant problems for the bureaus, including negative publicity and legislative action which could adversely affect the industry.

 

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