Chapter 9: Your Credit Bureau File

You can run, but you cannot hide when it comes to your credit history. Even 20 years ago, a move across the country meant a good chance of leaving behind some credit problems that lenders might not discover. Those days are long gone, much to the relief of all lenders because of centralized credit bureaus. Credit rating agencies are actually clearing houses of information. If you don’t know them, – they certainly know you. They are Equifax, TransUnion and Experian, and most consumers have a unique file with each company containing overlapping, or different, credit information with all three firms.

Credit bureaus do not actively gather facts and reports. They collect information from banks, credit card issuers and almost all other lenders. They do not rate customers, but accumulate, sort and sell factual information as a central clearinghouse. At regular intervals, tens of thousands of lenders simply exchange their data with the credit bureaus, which instantly updates consumers’ files with new accounts or fresh information.

Everyone who lends money uses the credit bureaus as a reference source. Lenders receive a reduced price to purchase files in return for exchanging their customer data. It means borrowers can stop wondering if their late payment won’t be noticed or reported, or a repossession might not show up. It will, without doubt - and quite quickly. After all, your credit rating is your factual, detailed financial reputation and lenders and credit bureaus have much longer memories than debtors.