Credit Bureau Essay

Topics: Credit score, Credit rating, Credit bureau Pages: 5 (1356 words) Published: April 21, 2013
Consumer Law|
The Credit Bureau
Consumer Agency Report|


Credit reporting companies serve as a ball of information about the consumer use of credit as reported by those by which the consumers borrow credit. Lenders gather and use this information to counterpart any data they have already obtained directly about the borrower’s creditworthiness to aid in their lending making decisions. Lenders have the incitement to report their experiences with the borrowers for the gain of other creditor’s data.

The essential of credit data are represented by the consumers representation based on his or hers borrowing behaviors of repayment over time. Today, the regulation has led to a high automated worldwide firm that collect detailed oriented, complete information and conform with a range of polices that’s in the best interest of the consumer.

Credit reporting companies give businesses intuition into a consumer’s past behaviors, similar to the prospective an employer may use a candidate’s college transcript. These intuitions may be used to make decisions about his or her stability as well as the willingness to repay debt. Without this information borrowers would more than likely have to provide other information about themselves when applying for any type sought after credit. History

Credit- reporting agencies emerged first in the United States due to the countries strong commercial orientation was highly conducive to institutional experimentation. Credit bureaus were known in some countries from the early 1860s, due to the industry experiencing a rapid growth only after World War I. There origination was purposed to facilitate the exchange of credit information among merchants. The recommenders usually local or suppliers with whom an individual has previously done business with. The small amount of credit that was granted was solely based on the merchants personal knowledge of the customer, a change came about once the credit bureaus came into full swing.

The earliest known credit bureaus maintained a list of customers who were considered by the merchants to be a risk. The U.S. population became more mobile and the credit bureaus began to expand to server a wider range of the population of dispersed merchants after World War I. A void that once needed validated was now filled by the merchants being provided with the information that could be used to make decisions on whether to grant the consumer with credit or not. Before the development of speedy computers and data processing readiness that had the capability of processing a variety of credit information, merchants that granted credit only had the capability of relying on investigations of the individual, public information, employment records, newspapers, and information from landlords about the consumer. Credit Bureaus Today

There are currently three major credit bureaus in the United States are affiliated with the Associated Credit Bureaus, Inc. Founded in 1906, the international trade association provides its members with fraud prevention, credit and mortgage reports, risk management services, collection services, employment screening and verification services. The Associated Credit Bureaus, Inc. represents the consumer credit reporting information industry before state and federal legislators. Also, it represents the industry in the main stream media as far as consumer credit reporting issues. There are over 500 member of the American credit reporting agencies, collection services, employment reporting, mortgage and tenant screening services.

There are over one billion credit cards that are being used daily in the United States which gives the consumer credit bureaus the importance as well as growth today. Similarity the number of consumer credit reports are issued every year with in the United States. Over two billion pieces of data are entered on the monthly basis into credit records. There are...
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