Getting to Know the Credit Bureaus

Getting to Know the Credit Bureaus

Credit bureaus are for-profit companies that track personal, financial and credit information on individual consumers. Each person has three credit reports, one from each of the three major credit bureaus: Equifax, Experian and Transunion. Most of the information on the credit report comes from creditors who report information about your accounts with them to the bureaus. This usually includes the total credit available, the current balance, the status of the account and your payment history. Credit bureaus also draw information from public records about such events as bankruptcy, judgments and liens. Because not every creditor will report to all three bureaus, your credit report from each credit bureau may differ somewhat.

Most information stays on your report for seven years. Bankruptcies are reported for seven or ten years from the date of filing, depending on what typr of bankruptcy and some states have special regulations pertaining to how long collections and paid liens can be reported. You can get a copy of your credit report for free once a year, by going to www.annualcreditreport.com. You are also entitled to a free credit report if you have been turned down for credit within the past 60 days, fear that you have been the victim of fraud or identity theft, or are applying for a job in the next several months. Otherwise, the credit bureaus can charge for your credit report. The credit score, a single number between 300 and 850 that sums up your creditworthiness, is never entirely free, although the credit bureaus may include it for “free” with another paid service, like a 3-in-1 report or credit monitoring.

When you contact credit bureaus, one of the first things they will tell you is that if you find errors on your credit report, you should not use a credit repair company, but should go through the dispute process yourself. While it is true that there is no cost to dispute items on your credit report on your own, most consumers show little results from the do-it-yourself approach. This is because the credit bureaus are huge bureaucracies, as a result of having to track multiple items on the files of over 100 million Americans. Because they are so large and so busy, they view people disputing their credit as little more than a nuisance. They will use a number of tactics to encourage the consumer to go away without causing additional work on their part. In addition, to get anywhere with the credit bureaus, the person making the dispute needs to have a thorough knowledge of the consumer credit laws, which guarantee each consumer certain rights and obligates the credit bureaus to perform certain actions. In order to familiarize yourself with the applicable laws and the winning strategies you will need to repair your credit, it takes a huge amount of time and effort. After investing months and getting frustrating results, many consumers give up, either by dropping the issue and living with bad credit, or hiring a credit repair firm.

The amount of time it will take to clean up your credit depends on a number of factors, including your initial credit status, the number of items you want to dispute, the dedication to consistently mail dispute letters and promptly respond to credit bureau correspondence, and the effectiveness of your use of consumer credit laws to get positive results. For an accurate estimate of how long the process will take, consult with a reputable credit repair company.