Understanding the Main Credit Bureau Reports

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The information on your credit report determines what your overall credit score is. This score can determine whether or not you qualify for loans or credit cards. It can also determine whether or not you can buy a home, rent an apartment, buy a vehicle, or even get an education.

If you do qualify for these things, you will have lower interest rates on these lines of credit the higher your score is. When you’re trying to improve your credit score, the first thing you need to do is understand that different components of your credit report.

There are different credit reporting agencies that are compiling the information that’s on your credit report. It can seem overwhelming when you are trying to understand the main credit bureau reporting agencies and everything that’s on your credit report, but the first step to having good credit is having a comprehensive understanding of the three main credit agencies. These agencies are Experian, Equifax, and TransUnion. These three bureaus are for-profit, publicly-traded companies that aren’t owned by the government. They all provide the information that’s used to calculate a person’s credit score, but the bureaus don’t actually calculate the scores themselves.

Each agency uses a slightly different credit scoring model. These models all weigh things differently. Also, they can have different ranges. So while a 650 may mean one thing in one model, the same score might mean something different on another model. Many people look at their credit reports, and they wonder why their score is different on the different reports. The scores can vary because the information may be slightly different. For example, updates to a person’s credit report may not be made at the same time, and each report may not have the same information.

So how are the three credit reports different? Experian and Equifax, for example, will only note the name of your employer when listing your employment history where TransUnion will list more detailed information in your employment history, like your title and the dates you were employed in that position. Another thing to consider is that one agency might not have all of the creditors listed on the other two. This is because creditors are not required to send information to the credit bureaus, and it’s a process that is voluntary.

You don’t need to be concerned if there is missing information on a report. However, you should be concerned if any of the three reports have inaccurate information. The best way to keep track of this is to take advantage of a credit monitoring service like those available through companies like Credit Sesame. With this type of service, you can get a free credit report where you will be able to compare the information reported by each credit bureau to make sure that they each have the correct information.

The world of credit and personal finance can seem like a lot to understand, but it’s not as difficult to decipher the information on your credit report as it may seem. Fortunately, there are a ton of resources available that will help to educate you. 

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