What is a Credit Reporting Agency?

A credit reporting agency compiles all the information about your credit history. As soon as you establish a credit file the three major credit reporting agencies begin to compile and store information about your credit accounts. Your credit file begins when you apply for credit whether you are approved or not. The first thing that shows up on your file is your personal information such as your name, address, place of employment, social security, and date of birth. The creditor that took a look at your credit file will also have a credit inquiry on your file. Each creditor has their own unique inquiry.

Trade lines

When you are approved for credit that creditor will send information to credit reporting agencies regarding the information for your account. This information is called a trade line and it will include information such as the name of the creditor, credit limit, date last paid, and information about how the account has been paid.

Three Credit Reporting Agencies

The three major credit reporting agencies are TransUnion, Equifax, and Experian. All three credit reporting agencies may have different information that's why it's important to order all three credit reports. To get a free copy of your report go to annualcreditreport.com. This website will allow you to get a copy from all three bureaus once a year. If you were turned down for a loan you can get a copy of your credit report free even though you have already received a free copy for the year. If you are a victim of identity theft you can also get a free copy of your report.

Credit Score

Once your credit report is formed you begin to establish a FICO score or credit score. Lenders use this score to determine the likelihood that you will default on a loan. You always want your credit score to be as high as possible because higher scores enable you to receive more favorable terms and agreements on mortgages, credit cards and auto loans. Your credit score can range from 300 to 850. There are five factors that contribute to the formation of your credit score. These categories include your payment history, amount of debt owed, types of accounts, length of credit file, and new accounts. Your pay history contributes 35 percent towards your credit score. That's why it is so important to pay your debts on time. The amount of debt you owe contributes 30 percent towards your credit score.

Bad Credit

You always want to avoid judgments, tax liens, foreclosures and bankruptcies because these can lower your credit score and remain on your credit file for at least seven years. Some items such as bankruptcies will remain on your file for ten years from the date of filing.

Source

http://74.125.93.132/search?q=cache:rb_wt-QiNToJ:www.creditinfocenter.com/creditreports/CreditBureauContactInfohtm.shtml+what+is+a+credit+reporting+agency&cd=2&hl=en&ct=clnk&gl=us&client=firefox-a

Source

http://money.howstuffworks.com/personal-finance/debt-management/credit-reporting-agency.htm

Source
http://www.annualcreditreport.com