What in Your Credit Report?

Eyes, fingerprints and DNA are unique to every person and can be used for identification. Credit 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 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)
• 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.