Credit Bureaus are agencies that store the credit and personal information. Based on the request from employers and from creditors like banks, mortgage companies, auto insurance companies, credit and personal information are sent out to them.
For example, when you are about to join in an organization, employers may query these bureaus to know about your personal information; If you have applied for any loans with some creditors, in that case, they may query these bureaus to know about your credit history; Some organizations might use these information to send solicitation mails to you. From the information provided by the credit bureaus, creditors can easily judge your personal behaviour and financial strength and thereby take the proper decision on whether to accept or decline your request.
The three major Credit Bureaus in USA are:
Equifax
Transunion
Experian
It is always good to check the credit history quiet often. Sometimes it helps to negotiate a deal with creditors or to find out any bad things done by others.(e.g. some XYZ person would have bought a credit card on your name and they may be using it). You have the right to examine your credit history with these credit bureaus by paying a small fee to them. If you have been denied credit, then there is no charge for getting the credit information from them. You can talk to them and get to know the reason for credit denial.
What Credit Bureaus do - examples:
Records number of credit accounts.
Records the balance on each credit accounts.
Records the revolving balances.
Records your payment habits and history.
Records delinquent payments, late payments etc.
Records personal information.
Records the bad things done in the past.
Records employment information.
Updates credit scores.
When you are about to join in a new employer, rent an apartment, buy a new car on loan, get an auto insurance, buy a new home, get a credit card, get utilities, always credit and personal information plays a major and vital role. If some bad information is written by these credit bureaus, you may not get a job, or apartments, etc.
In US, Credit score is the most important one and it helps you to save a lot of money. As of now, the maximum credit score is 850. Credit scores between 700 and 800 are considered to be the good scores. If you have a good credit score, you can expect a low interest rates for your loans or credit cards. Think about a home you are going to buy for $300,000 in New York. If you have a good credit score, you would buy the home at lowest interest rate; otherwise you may be losing couple of ten thousand dollars in interest rates.
Tips:
Always pay your payments on time. Avoid delinquent or late payments.
If credit card is denied do not apply for another credit card immediately. Wait for some time until your credit score gets improved.
At a time, do not apply for several credit cards.
Avoid revolving balances on your account.
If your credit card limit is $2500, and your balance amount to be paid is $2000, always try to pay the entire balance amount.
If there are any problems on your credit history, try to resolve the problem as soon as possible.
Wherever you go, try to rent an apartment on your name. When you move to some other place, you have to provide your residential history. This would help to improve your personal history.
Do not try to change employers very often.
