What Are Credit Reporting Agencies?

Credit reporting agencies collect an individual’s financial information, compile it into a credit report and, for a fee, make it available to the individual and to other authorized parties, including financial institutions. Generally when you apply for a loan you give the lender permission to get a copy of your credit report. Companies that lend money rely on credit reporting agencies and the credit reports they generate to help them assess a customer’s ability to repay what they borrow.
 
Although there are many local and regional credit bureaus throughout the United States, most credit bureaus are either owned or under contract to the nation's three major credit reporting agencies: Equifax, Experian (formerly TRW) and TransUnion.


Understanding Your Credit Report & Your Credit Score
When you apply for a credit card, car loan, personal loan or mortgage, the lender will want to know your past history of borrowing in order to understand the risk they might be taking by lending you money. The status of your credit score will depend on how good you’ve been in the past at repaying your debts. A bad credit history can affect the credit that’s made available to you or even cause you to be denied credit completely. On the other hand, a healthy credit report and a high credit score can mean better financial options for you. To find out where you stand, a lender will go to a credit reporting agency to get your credit report.