Consumer Law| The Credit Bureau | Consumer Agency Report| 4/8/2013 | Introduction Credit reporting companies serve as a ball of information about the consumer use of credit as reported by those by which the consumers borrow credit. Lenders gather and use this information to counterpart any data they have already obtained directly about the borrower’s creditworthiness to aid in their lending making decisions. Lenders have the incitement to report their experiences with the borrowers for the gain of other creditor’s data.
The essential of credit data are represented by the consumers representation based on his or hers borrowing behaviors of repayment over time. Today, the regulation has led to a high automated worldwide firm that collect detailed oriented, complete information and conform with a range of polices that’s in the best interest of the consumer. Credit reporting companies give businesses intuition into a consumer’s past behaviors, similar to the prospective an employer may use a candidate’s college transcript. These intuitions may be used to make decisions about his or her stability as well as the willingness to repay debt.
Without this information borrowers would more than likely have to provide other information about themselves when applying for any type sought after credit. History Credit- reporting agencies emerged first in the United States due to the countries strong commercial orientation was highly conducive to institutional experimentation. Credit bureaus were known in some countries from the early 1860s, due to the industry experiencing a rapid growth only after World War I. There origination was purposed to facilitate the exchange of credit information among merchants.
The recommenders usually local or suppliers with whom an individual has previously done business with. The small amount of credit that was granted was solely based on the merchants personal knowledge of the customer, a change came about once the credit bureaus came into full swing. The earliest known credit bureaus maintained a list of customers who were considered by the merchants to be a risk. The U. S. population became more mobile and the credit bureaus began to expand to server a wider range of the population of dispersed merchants after World War I.
A void that once needed validated was now filled by the merchants being provided with the information that could be used to make decisions on whether to grant the consumer with credit or not. Before the development of speedy computers and data processing readiness that had the capability of processing a variety of credit information, merchants that granted credit only had the capability of relying on investigations of the individual, public information, employment records, newspapers, and information from landlords about the consumer. Credit Bureaus Today
There are currently three major credit bureaus in the United States are affiliated with the Associated Credit Bureaus, Inc. Founded in 1906, the international trade association provides its members with fraud prevention, credit and mortgage reports, risk management services, collection services, employment screening and verification services. The Associated Credit Bureaus, Inc. represents the consumer credit reporting information industry before state and federal legislators. Also, it represents the industry in the main stream media as far as consumer credit reporting issues.
There are over 500 member of the American credit reporting agencies, collection services, employment reporting, mortgage and tenant screening services. There are over one billion credit cards that are being used daily in the United States which gives the consumer credit bureaus the importance as well as growth today. Similarity the number of consumer credit reports are issued every year with in the United States. Over two billion pieces of data are entered on the monthly basis into credit records. There are 190 illion credit files maintained by the three major reported credit bureaus which are Trans Union, Experian, and Equifax in the United States. In an article called Collections and Credit Risk, written by Sidney Hill, Jr. , consumers will soon get a chance to see their credit scores and learn how they really rank with lenders. The credit scores lenders use to make decisions about loans credit cards will be made available on the Web, also included the information about how they come up with the scores as well how the scores can be improved.
The State and Federal legislation protects the privacy of personal data while granting consumers access to their own credit information which forced the change. Credit card companies rely heavily on “risk based” credit scoring to aid in determining the credit worthiness of a consumer, this information was not privet to the consumer applying for credit. The scores were designed to see how person would repay their debt as well as being very valuable in the determination of and individual being granted credit.
It wasn’t until the end of 2000 that the three major credit agencies made the information known via the internet. The Three Major Credit Bureaus Trans Union founded in 1968 as the holding company of Union Tank Car which was a rail transportation equipment company. They joined the credit aspect in 1969 when they began to acquiring major city and regional credit bureaus. They offer portfolio and risk management as well as a primary source of credit information. They operation is nationwide through a host of offices and independent credit bureaus.
They are a server of many industries that on the regular evaluate credit risk as well as verify information about their customer base which include hospitals, communication and energy companies, collection agencies, retailers, financial and banking services and insurance companies. Equifax founded in 1899 was a Retail Credit Company they had offices through the North America by the 1920’s. By 1960 they had credit files for millions of Americans. They serve the credit card, retail, financial services, transportation, utilities, health care industries and the government.
The global aspect of operations includes commercial credit information services, payment services, software, consumer credit, and consulting services. They provide the systems that aid granting credit, check transactions, predict consumer credit, manage risk, payment services and process credit cards. The countries serviced by Equifax the United States, Brazil, El Salvador, Canada, Chile, Argentina, the United Kingdom, Portugal, and Spain. Experian founded in England in 1980 as CCN systems.
They expanded to the United States in 1996 by acquiring a company named TRW Information Services. Their purpose is to use its power of information to help its clients is to target forthcoming customers, management and maintain existing customer’s relationships and have the eye for profitable growth opportunities. They have the capability of allowing their customers to conduct secure and profitable e-business through its web based products and services. Their employees support clients in over 50 countries. Resolution
Every day credit bureaus receive calls from disgruntled consumers about mistakes on their credit reports, they file complaints against credit card companies, and disputes as well as to requesting their credit scores. The customer service representative takes the information from the consumer for example a dispute of incorrect information on their credit report and investigates the mistake which takes about 30 days to get the information. Once the information comes back either true or negative then you receive a letter in the mail as to the decision.
Conclusion The consumer credit file has become one of the most important documents used in the decision making as to whether a consumer gets credit or not. As consumers come into the understanding of the influence of their credit reports their interest will be in the monitoring of the data reported by the credit bureaus. The credit bureaus are not always on the same page as far as consumer information meaning that the bureaus may have some information in their files that the other bureaus may not have but is in the best interest of the consumer.
Bibliography Wise Geek. Conjecture, n. d. Web. 08 Mar. 2013 “Best Bank Rates | Compare the Best Interest Rates Today. ” GoBankingRates. com. N. p. , n. d. Web. 08 Mar. 2013. WiseGeek. Conjecture, n. d. Web. 08 Mar. 2013. N. p. , n. d. Web. 8 Mar. 2013. <http://www. referenceforbusiness. com/small/Co-Di/Credit-Bureaus. html>. Hill, Sidney, Jr. “Collections and Credit Risk. ” (n. d. ): n. pag. Print.