Credit Reporting Agencies (or CRAs) are also known as credit bureaus. The three major credit bureaus are Equifax, TransUnion, and Experian (formerly TRW). There are also many other smaller credit bureaus in the United States. When consumers apply for financing, creditors will generally rely heavily on the information contained in a consumer's credit file with one or more of the three bureaus before deciding whether to extend credit, and at what credit terms.
Over the years, credit reporting agencies have had an interesting reputation with consumers. Many consumers have viewed the credit reporting bureaus with a peculiar combination of fear and contempt. Fear because many consumers see the agencies sort of like "Big Brother" in George Orwell's 1984, always keeping an eye on them. Many consumers felt contempt for the credit bureaus because they felt the credit bureaus had too much control over their financial future and they were powerless to do much about it.
Today, credit smart consumers would be wise to view the credit bureaus exactly as they are: They are massive storehouses of consumer credit information. The information that is contained in credit files is the information that is simply reported to the credit reporting agencies (Experian, Equifax, and TransUnion) by creditors. Most of the information is correct, but certainly a fair amount of information will be incorrect. Why? Because when youâ€™re dealing with mountains and mountains of data, everything won't always be 100% accurate, even if it is a misspelled name, or incorrect address, or out of date employment information, incorrect payment information, etc. The only one who can possibly know if the information in your credit report is accurate is you!
The important thing for consumers to know is that it is vital that the information in your credit report is correct, because the information in your credit report determines your credit score, and your credit score can cost you or save you a lot of money. Checking your credit report can also be your first line of defense against identity theft.