Credit Bureaus, who are they? What effect do they have on my life?

Credit Bureaus - What are they?

There are three major credit bureaus--Equifax, Experian and TransUnion. Traditionally, Experian (formerly called "TRW”) had the most market share at about 70%. Equifax is now gaining more popularity while TransUnion is lagging behind.

So if you're applying for a home loan or car loan, these agencies act as "credit reporting agencies." Your lenders will subscribe to them and use them for "pulling" your credit report and checking out your credit history. These agencies are subject to the Fair Credit Reporting Act, which says that derogatory items can stay on your report for seven years. For example, if you had a phone bill go to collection this information will show on your credit report for seven years. If you had a bankruptcy, lien, charge-off, repossession or any type of derogatory credit item, this will also appear on your credit report for seven years. If you had a foreclosure (gave a house back to the lender for nonpayment) this can stay on your report for ten years.

The good news is that you can "dispute" these derogatory items with the credit bureaus online, on the phone, or by mail using my sample dispute letters. In many cases these incidences will eventually not appear on your record, either because they are false or the creditor in question loses interest in reporting your derogatory item.