There are 3 credit bureaus in the United States. They are Experian, TransUnion and Equifax. The 3 credit bureaus are responsible for maintaining credit scores for each person who lives in the United States, with a few exceptions. Generally, these bureaus maintain credit scores for different regions in the country. For instance, Equifax does it for the east coast, Experian is looking after the Midwest, and the west coast is being covered by TransUnion. However, this segregation is not as distinct as this. Their working areas often overlap each other.
Why do the 3 credit bureaus maintain record for everybody in the country? Actually, they are required to do this for a very important reason. Records of all your financial transactions are maintained by these agencies. The numbers of times you have used your credit card, the number of times you have failed to pay back the money on time or defaulted, the instances when you could pay back on or before the due date are all recorded. If you have taken a loan, the details of this will also be there against your record. If you have paid back successfully, it will show positively in your record. Based on all this, the agencies will give you a score – this is known as your credit score.
Let us assume that you are asking for a loan – a car loan or a home loan. The lending company will certainly want to check what your credit score is before the money is issued to you. The terms of the loan are likely to be friendly if you have a better score. If your score is poor, the loan may even be rejected. If it is rejected, it will show in your record, and will bring down your score further.
Why you should check the score with 3 credit bureaus
You should certainly find out what your score is from the 3 bureaus. Sometimes, these agencies by mistake will maintain wrong information. For instance, perhaps you defaulted once because of some temporary glitch, but have subsequently paid back in full every time. However even then, the agencies might hold this against you, as they are known to maintain the records for as long as 7 years. Or perhaps there is a wrong entry against your name.
By checking the details with 3 credit bureaus, you can find out all about this. If you notice that there is any mistake, you should immediately bring it to the attention of the authorities. They will make the corrections, and this will reflect positively in your credit score. This will help you get better deals from lending companies. Your applications for credit cards will also not be turned down.
The good news is that, you can check the details against your record, and your credit score too absolutely free. You can do this one time every year. There is a cost for checking it more than once in a year. So go ahead and find out what the 3 credit bureaus have with them about your financial transactions.