Think about the risks involved in lending your money to
people you don’t even know on a personal level. Creditors, therefore, need a
third party to act as a legitimate witness to the money changing hands here. That’s
where Credit Bureaus enter the picture.
Following are a few facts about credit bureaus to create a
better understanding of their workings. They can be highly effective for you as
well when it comes to fast
credit repair.
1.
What is the Purpose?
What if you lend $100 to a friend and they disappear from
the picture just when they had to repay? It would be nigh impossible for you to
track them down. Bidding adieu to your money would be the only choice left.
However, creditors cannot afford disappearances of debtors. A Credit Bureau is
a way to legitimize the entire procedure so that the lender and creditor can
both remain accountable to the third party. Their purpose is to be the intermediary
entity whose job is to ensure maximum money security for all involved.
2.
What Does the Law Say?
There are specific laws that govern the workings of a credit
bureau. The law lists credit reporting
as one of the primary tasks of the bureau. The bureau has to ensure that the
customer gets complete and verified credit information. To carry out their
tasks effectively, the Fair Credit Repair Act (FCRA), signed in 1971, allows
all credit bureaus to access the customer’s credit and personal details as per
their needs and requirements.
3.
How Do They Access Your Information?
Your lenders report to the bureau. So, when you buy a TV set
for your drawing room or mortgage a house, the information reaches the bureau.
Similarly, your creditor sends out the history of your unpaid debts,
bankruptcies, and delinquencies to your bureau to record them in your credit
report. They also have access to your personal histories. Employers generally contact the
applicant’s credit bureau for the authentication of their credentials. Your
histories stay in their databases for the years to come.
4.
How Do They Benefit Consumers?
Credit bureaus are the most efficient avenues to get
hold of your credit report. They are the drafters and receivers of all your
credit requests, debts, payments, delinquencies, and etcetera. They also have
your history in their databases. So, it is very easy to contact them, for the
correction of any discrepancies that can occur in your credit report.
5.
How Do They Earn Money?
Credit bureaus sell their services, usually to the
creditors, including banks, credit card companies, retailers, lenders, and
anyone who lends money. Apart from being a keeper for credit histories, the
bureaus have several tasks to perform. They also work as marketers for the
lenders in order to serve and stay in contact with their customers. They provide
information on how to be an effective credit card holder besides the required
data.
No comments:
Post a Comment