reporting

Understanding How Credit Information Is Reported

In order to effectively protect your credit history, you must first understand how credit information is reported to the consumer reporting agencies. The consumer reporting agencies (Trans Union, Experian, Equifax and CSC Credit Services) receive credit related information and store that information in sophisticated databases. Those that provide credit information to the agencies are known as "furnishers." Furnishers are typically lenders (such as those that provide revolving credit lines, mortgages, student loans and the like) but may also include others like public information venders that collect and provide public record information (such as judgments and bankruptcies) to the consumer reporting agencies.

One common misconception is that when furnishers report your credit information that information posts directly to your "credit report" which in turn is provided to potential creditors when you apply for new credit.  This misconception is wrong for many reasons all of which relate to how the agencies collect, sort and then disseminate credit information.

Possible Credit Files - You May Have More Than One Credit File

Consumer reporting agencies (commonly known as "credit reporting agencies" or "credit bureaus") provide consumer reports (commonly  known as "credit reports") to subscribers who use the information to make credit granting decisions.  In order to obtain a consumer report, the agencies require their subscribers (i.e. banks, department stores, insurance companies and others) to furnish the name and address for the person on whom they are inquiring.  Some agencies, such as Trans Union, also encourage subscribers to provide a consumer's social security number as well. At any given time, the national consumer reporting agencies maintain hundreds of millions of "credit files" in their databases.  A credit file contains indicative information (such as name, address, former address, social security number and other information) and individual trade lines (such as account number, credit terms, payment history and other items) belonging to the consumer.  These files relate to the credit active consumers across the United States of which there are approximately 250 million, meaning that many consumers have more than one file in a consumer reporting agency's system.