Credit Reporting Agencies

Credit Reporting Agencies

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The U.S. Fair Credit Reporting Act of 1971 governs the credit reporting agencies, also known as credit bureaus. It was amended in 1997, and again with the Fair and Accurate Credit Transactions (FACT) Act of 2003, and includes stronger protections for consumers by increasing the responsibility of the credit bureaus to investigate consumer disputes.

What is "the credit reporting agency?"
There are three big ones: Experian, Equifax, and Trans Union, all with national databases. There is also a fourth one, called Innovis. Most credit grantors report to one or more of them. In general, the credit reporting agencies don't pass information back and forth to each other. So you actually have at least three credit histories, not one.

There are also local credit reporting agencies and reporting agencies. They're nowhere near as widespread as the big three. However, they are also subject to the Fair Credit Reporting Act, so anything said here applies to them, too.
Who assigns my credit rating?
You don't have a credit rating, as such. Each credit reporting agency collects information from banks, finance companies, department stores, taxing authorities, landlords, and other "credit grantors" and keeps the information in your file. The file is supposed to be an objective record of your credit history, in essence a sorted copy of information furnished to the credit reporting agency by companies you have done business with on credit.

The credit history shows your name, address, Social Security number and birth date; your open accounts, with balances and credit limits; whether you pay them on time or not; whether any of them are or were turned over for collection; any suits, judgments, or tax liens; and so on. It may also include, according to {Your Credit Rating}, your employer, position, and income; your former address and former employer; your spouse's name, SSN, employer, and income; and whether you rent or own your home.

The other information they keep is your credit score - a calculation so complex that there is no exact formula to print. Credit grantors who pay extra (which is 30% of them) see that score in addition to the factual information. There is a lot of emphasis on credit scoring lately. Read this for more information. Consumers were previously prohibited from seeing their credit scores, but as of the year 2000, Fair Isaac began allowing consumers to see their scores. However, it will cost extra if you wish to see your score when you order your credit report.
How long does it take for an event (positive or negative) to show up on my credit report?
Suppose you've just paid off a large loan and you're applying for a car loan or a mortgage. It would be nice to know that the lender who pulls your report will see that the old loan was paid off.

However, credit grantors' contracts with credit reporting agencies may or may not specify a timetable for grantors to report new information to the bureau. If the credit grantors are tardy, there's not much the credit reporting agency can or will do, since those same credit grantors are also the customers of the credit reporting agency. Also, credit reporting agencies may gather information directly from public records, on any schedule they please.

The answer to this Q, as a practical matter, is that there is no time limit for posting information. In fact, you don't have a legal right to insist on any report being made at all. (You can get false items corrected, but you can't legally insist on omitted information being added.) If you've actually paid off a debt that is still reported as unpaid, about all you can do is go through the procedure in our document, How to Repair Your Credit.