The Bureaus

You might hear a lot about The Bureaus since you got your first credit card. But what are they? What do they do? And do they affect your credit score?

What Are The Bureaus?

Credit bureaus, or simply the bureaus, are responsible for collecting and maintaining individual credit information. They may also sell this information to consumers, creditors, and lenders in the form of credit reports.

There are dozens of credit bureaus in the U.S. but the biggest are these three: ExperianEquifax and TransUnion. These three have different reporting methods thus the credit scores they will provide are all different from each other.

The Bureaus

According to experts, it’s best to bring all your credit scores from these three for a higher chance to get the best loan terms.

To avoid confusion, you need to know that credit bureaus are different from credit rating agencies. Credit bureaus are responsible for reporting credit scores while credit rating agencies are the ones who assess if a company can repay a loan.

Also, the bureaus are reflected on your credit report as “collections” accounts. This will only happen if you forget to pay your bill. A collection on your credit report can damage your credit score unless you take the necessary actions to remove it.

Things You Need To Know About The Bureaus

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Types of information they collect

Credit bureaus store and maintain a lot of information concerning your credit history. Starting from the time you opened up your very first credit account to all other details like your payment history, the available amount of credit, amount of credit you are using, outstanding debt collections, and public record details like bankruptcy, foreclosure, repossession, and tax liens.

Aside from these, they also have non-credit information such as your previous and current addresses, previous and current employers, and the date of your birth.

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Types of information they collect

Credit bureaus store and maintain a lot of information concerning your credit history. Starting from the time you opened up your very first credit account to all other details like your payment history, the available amount of credit, amount of credit you are using, outstanding debt collections, and public record details like bankruptcy, foreclosure, repossession, and tax liens.

Aside from these, they also have non-credit information such as your previous and current addresses, previous and current employers, and the date of your birth.

Sources of information

With all the type of information they acquire from each individual, you might wonder where they get all this from. The answer is from banks and other businesses. These institutions provide credit bureaus consumer information. Most of the companies you have business with send updates on your open accounts to credit bureaus. The bureaus also receive information from public court records. 

All the major credit bureaus acquire information from different sources but they don’t share this with one another. This is the reason why you will have differences in your credit report from each of the bureaus.

How it Works

Sources of information

With all the type of information they acquire from each individual, you might wonder where they get all this from. The answer is from banks and other businesses. These institutions provide credit bureaus consumer information. Most of the companies you have business with send updates on your open accounts to credit bureaus. The bureaus also receive information from public court records. 

All the major credit bureaus acquire information from different sources but they don’t share this with one another. This is the reason why you will have differences in your credit report from each of the bureaus.

How it Works

How Collection Accounts Affect Credit Report

As mentioned, bureaus are seen as “collections” in your credit report. If you fail to pay your bills, then this will reflect on your credit report. These accounts affect your credit score negatively depending on the type of debt you owed.

Any kind of negative information will affect your credit scores because it indicates that you are not managing your credit well. If you have a low credit score, it will be difficult for you to apply for new credit in the future with the greatest interest rates and terms possible.

How To Remove Collections Account In Your Credit Report

If the collections account found on your credit reports is accurate, it means that the odds of getting them removed are slim. But there are some ways on how you can remove them in a faster way.

Check all of your credit reports

You are allowed to get one free credit report per year per bureau. So it means you can get three free credit reports from each of the bureaus. Check all the reports you have and see if there is negative information reported.

Determine the legitimacy of the account

If the collection account is found to be legitimate, you will need to work harder on getting it removed. But if not, removal is possible through a dispute.

Choose a Plan of Action

There are few ways you can manage the removal of collection accounts on your reports.
  • As previously mentioned, if the collection account is inaccurate, you can make a dispute to the credit bureau reporting it.
  • If you checked that the account is legal but you already paid for it, you may contact the collection agency and request a goodwill adjustment.
  • Or you can just wait and be patient. Usually, a collection remains on your reports for seven years after the date of delinquency. Even if it is unpaid, the impact on your credit score will be removed over time.

Know the limitations

Even if a collection account can cause damage to your credit report, it will only be temporary. But still, you need to learn to be wise in managing your credit and get over it through time.

Need Help To Remove Negative Accounts From Your Credit Report?

If you need further assistance in this matter, you can apply for a credit consultation with 007 Credit Agent. Our team of professional credit agents will analyze and provide solutions to remove negative items in your credit reports.