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Eyes, fingerprints and DNA are unique to every
person and can be used for identification. Credit Bureau reports
could be compared to your DNA-but instead of giving you a
physical identity, it gives you a financial identity. Every
report is unique to each person, the trick comes in understanding
what kind of information Credit Reporting Agencies (CRA's)
buy and sell about you. Credit Bureau reports contain information
about where you live, what you do for a living, where you
have applied for credit and how you pay your mortgage, rent,
car payment and other credit granted in your name.
The three main CRA's in the United States are
Equifax, Experian (formerly TRW) and Trans Union. Individuals
and companies that have interest in how promptly you pay your
bills become members to CRA's. They can be members of one
or all of the CRA's. This means that if you have ever applied
for credit, you probably have a history with all of them.
Landlords, banks, mortgage companies, finance companies, insurance
companies, bankcard lenders, retail department stores and
even employers are typical members of credit bureaus. Members
of CRA's buy the information about you that is contained in
your credit bureau report.
Once companies or individuals become members,
the first thing that they must do is gain written consent
from you to buy information from your credit file. No matter
if you are applying for a job, credit or insurance, The Fair
Credit Reporting Act (FCRA) requires that the agency have
consent from you. They then submit the information they gathered
and obtain a report on you. They are billed from the CRA,
usually on a per-report basis. However, member companies are
not allowed to sell your credit report or information that
they gathered about you from the credit report. In many instances,
they aren't even allowed to share the information with you.
If you are denied credit, you are entitled to
see a certified copy of the credit bureau report from the
CRA within 60 days of the denial. Even if you aren't denied
credit, many financial advisors tell their clients to periodically
check their credit reports to ensure their accuracy. Inaccuracies
that negatively effect your credit rating could also effect
the rates you are offered on loans. The higher your rating,
the better rates you will be offered. Upon entering an agreement
with the member company, the company can also report information
about your pay history, current job/title and address to keep
your credit information current. Unless you have specified
otherwise in the initial consent, they can also order your
credit bureau for the purposes of locating you or employers
may use them as a basis for promotion. However, it's important
that member companies do not abuse their right to pull credit
histories since the number of inquiries to the CRA can also
negatively effect your credit rating.
CRA's can and do sell list names and addresses
of people on which they have files to banks and credit card
companies for the purpose of obtaining new customers. This
is where some of your mail phone solicitations originate.
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