Credit score reports done by agencies gather their consumer’s credit information by soliciting from lenders and creditors such as credit card companies and banks to join their systems and contribute their credit experience on consumers to the systems. Typically, creditors, lenders and debt collection agencies and the public records that a consumer has had a experience with are data providers for credit bureaus. They also report the payment practice with the consumer to the credit report bureaus. These data will be collected by the bureaus are then amassed into the credit bureaus’ data files. The outcome data is made accessible upon the request of the costumers to the credit bureaus for credit assessment and credit scoring purposes. In return for providing information to the agencies, creditors may use the system to obtain credit information on applicants to grant credits or evaluate existing consumer credit accounts.
Credit agencies are generally controlled by the Fair Credit Reporting Act, in which the federal law covers the individual consumer’s data by reporting agencies. Individual’s states may also have their own versions of the law. Under Federal law, credit reporting agencies also known as consumer reporting agencies, have several responsibilities to protect clients and the concealment of credit information. The three national credit reporting agencies especially in the United States are Experian, Equifax and Trans Union.
There is also referred to as the fourth national credit reporting agency named as Innovis, however, it does not presently considered as a factor in making decisions over credit matters. These credit bureaus are for-profit companies owned by a corporation. They are non-government institution, non-national, independent and throughout the country, they are generally affiliated with one of the three credit reporting agencies.