The three major credit-reporting agencies — Experian, TransUnion and Equifax — gather credit information about consumers. To assist in the gathering of this information, companies can keep track of customer account activities and report to the credit bureaus. In turn, they let consumers request a copy of their credit report. Banks and other lenders use a customer’s credit report to find out the level of risk in extending a loan. It’s very important that companies report accurate information to avoid problems for the consumer.
Getting Started
Consumer credit and payment activity isn’t automatically sent to your credit agency. Businesses need to first establish an account with the credit agency and begin transferring customer information to this service. To ensure that the company knows how to report information accurately, the various credit agencies run inspections prior to signing up a reporting contract with the business. In some cases, third-party agencies like Datalinx, will act as the link, seeking out businesses and helping them in establishing a connection with the credit bureau.
Businesses will report the details of consumer credit activity to the credit agency: credit cards or accounts that were opened and shut, the amount of accounts that the customer now has offered, the addresses for every account (which will help indicate how often each consumer has moved), the status of payments (whether they’re on time or late, and by how long) and some other problems that arise from consumer credit activity.
The Need for Accuracy
The information on a customer’s credit report comes from information that companies have reported. The information that appears on the credit report may establish the quality of a customer’s credit and how much a lender is willing to loan to this individual. Because of this, companies must report information as soon as possible to prevent jeopardizing a
consumer’s credit standing.
Companies can send information and updates directly to all the credit-reporting agencies, provided they are members in good standing and can provide the data in the bureaus preferred format. Consumers are responsible for confirming information too. If a customer discovers inaccurate information, he should gather evidence that the report is wrong and contact the credit bureau as well as the business enterprise. By way of example, assume a consumer finds that the credit report shows a credit card remains open although the account was closed five years ago. The customer must notify the credit agency and also the credit card company about the error, and the credit card company should also notify the credit agency to guarantee accuracy.
Consumer Resources
The Federal Fair Credit Reporting Act covers company reporting of consumer credit activity, and customer credit reporting also drops under the Federal Trade Commission’s oversight. If the credit bureau or the business fails to correct inaccurate information or is reluctant to assist the customer with making modifications, the customer can contact the FTC to report the issue.
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