By Robert W Linkonis Sr.
The vast majority of Americans have to obtain a loan to purchase a new car or home. During this process, the lender will order a copy of one or all of your three credit reports to make either a lending or an adverse action decision to the request. The interest rate or fees that you will have to pay on these loans may be directly related to how you have handled your credit.
Every one who has heard me speak over the years knows that I am big on handling credit "wisely". This means in part - maximizing your credit score by understanding the credit score. But - the credit score is computed based on data obtained by the three credit bureaus. How did the three credit bureaus rise to the level of power that they have to influence the lives of every one of us?
History of the Credit Bureaus
As far as back as the 1860s we can find traces of the origins of credit bureaus. Local merchants would share and maintain lists of
individuals who were high credit risks. That allowed them to offer more credit
to people who weren’t on the lists, whereas previously, most merchants only
extended credit to people they knew personally.
Later on as populations became more
mobile and a wider group of merchants across the country needed information to
help determine the creditworthiness of individuals, credit bureaus as we know
them today began to materialize.
What Are the Three Credit Bureaus?
Over the years, as the number of
people seeking credit grew, the ability to find consolidated credit reporting
information took on added importance. Today, some 2 billion data points are
entered every month into credit records in the U.S, and approximately 1 billion
credit cards are actively being used in the U.S. That’s a lot of data!
There are literally thousands of small credit bureaus doing business today. Most are just resellers of data from the "Big Three": Equifax, Experian and Transunion . Let’s take a
brief look at their history.
History of Equifax
Equifax was founded way back in 1899
as the Retail Credit Company. They grew at a furious pace and had offices
throughout North America by the 1920s. By the 1960s,
they had credit information for millions of Americans on file, and weren’t
afraid to share it with whoever wanted to pay them for it.
The passage of the Fair Credit Reporting Act of 1970 placed some limits on what
information could be shared with who, as well as put laws in place to govern
the credit industry and protect consumers. Retail Credit Company suffered a bit
of an image problem, but by 1975 they had successfully re-branded as Equifax.
TransUnion
TransUnion was the second of the Big
Three to come along. Founded in 1968 as the holding company of Union Tank Car,
a rail transportation equipment company, TransUnion jumped into the credit
sphere in 1969 when they began acquiring regional and major city credit
bureaus. They’ve grown over the years to the point where they now have over 250
offices across the U.S., as well as in 24 other countries.
Experian
Experian is the latecomer to the Big
Three. They were founded in 1980 in England as CCN Systems. They expanded to
the United States in 1996 by acquiring a company called TRW Information
Services. They’ve continued to grow their operations to 4 main geographic regions, employing 15,000 people working in 41 countries.
Here is a short video containing some very interesting facts about Experian:
http://www.youtube.com/watch?v=XMroGLW3n7w&inf_contact_key=5c6eeb84b72a543ab4e563aeb6c47b6f577370d543978a02c3630adb38d466f4
http://www.youtube.com/watch?v=XMroGLW3n7w&inf_contact_key=5c6eeb84b72a543ab4e563aeb6c47b6f577370d543978a02c3630adb38d466f4
Credit from here and beyond...
With the dawn of the internet age,
credit bureaus now offer the ability for consumers to view their credit reports
online, as well as give them access to dispute incorrect items that may have
shown up on their credit reports.
There are many ways, right and wrong, to dispute errors on your credit report. Always seek professional advice before blindly disputing errors on your credit reports. Did you know that disputing the incorrect way could sabotage your credit repair efforts??
Call a specialist today for a free credit consultation.
There is never a charge for a consult and good advice. Call today: 800-648-5157. Or visit us on the web: http://www.CreditRA.com
There is never a charge for a consult and good advice. Call today: 800-648-5157. Or visit us on the web: http://www.CreditRA.com
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