A credit reporting agency is a company that collects credit information for individuals and businesses, maintains a database of this information, and provides consumers and lenders with reports detailing the credit information, including a credit score.http://www.creditreport.com/creditreports/creditcheck/default.aspx Lenders will then use the information provided by credit reporting agencies to determine a potential borrower’s creditworthiness.

Credit reporting agencies work by collecting data, including: personal information, account information, and information obtained from public records. This information is then analyzed using a mathematical algorithm to determine a numerical score, by which lenders can analyze the risk involved in providing credit to consumers.

Credit reporting agencies are regulated by the federal Fair Credit Reporting Act that governs the collection and use of consumer information, The Fair Credit Billing Act designed to protect consumers from inequitable billing practices, the Fair and Accurate Credit Transactions Act, and Regulation B.http://debtor-creditor.lawyers.com/Fair-Credit-Reporting-Act.html

Credit reporting agencies began to emerge in the late 19th and early 20th centuries, as a means to provide central databases containing consumer and business entity’s credit information.http://www.referenceforbusiness.com/small/Co-Di/Credit-Bureaus.html As technology progressed, credit reporting agencies were able to provide faster access to credit information via online databases, and later provide reports directly to consumers by way of the internet.http://www.transunion.com/corporate/aboutUs/whoWeAre/history.pagehttp://www.equifax.com/cs/Satellite/EFX_Product_C1/1164920045013/5-1/5-1_Layout.htm?packedargs=Locale%3Den_UShttp://www.experianplc.com/about-experian/history.aspx Presently, the three major U.S. consumer credit reporting agencies are: Equifax, Experian, and TransUnion.http://www.referenceforbusiness.com/small/Co-Di/Credit-Bureaus.html

A credit report is a record of an individual’s credit activity.http://www.frbsf.org/publications/consumer/creditreport.html The information included on a credit report includes: personal information, account information, balances, payment history, and information on financial actions taken against a consumer available in state and county court records.http://www.frbsf.org/publications/consumer/creditreport.html The information listed on a credit report generally remains there for seven years, with a period of 10 years for personal bankruptcy.

Consumers are entitled to receive one free credit report each year, so that they may monitor their credit status and identify and discrepancies. Otherwise, there are a number of services available to consumers for a nominal monthly fee, available through the major credit reporting agencies and third party agencies.https://www.annualcreditreport.com/cra/index.jsp In addition to the credit report, these companies also offer financial services like credit monitoring and alerts, debt analysis, and credit repair assistance. http://www.frbsf.org/publications/consumer/creditreport.html

If a discrepancy is discovered on a credit report, it is the consumer’s responsibility to notify the crediting reporting agency of the disputed item in writing, and provide any supporting documents in order to have the item removed.http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm