All About Traditional Credit
What is a Credit Bureau?
A Credit Bureau is a company that collects and maintains consumer credit and payment information, and provides that information to its customers or other authorized users for a fee. A credit bureau is also referred to as a Credit Repository, a Consumer Reporting Agency or a Credit Reporting Agency (CRA). Credit bureaus collect and maintain personal information and financial data on individuals from a variety of sources, called information or data furnishers, with which the bureaus have a business relationship. Information furnishers are typically creditors, lenders, utilities and debt collection agencies that a consumer has had a financial relationship with. Information furnishers voluntarily report their payment experience with the consumer to the credit bureaus. Credit bureaus also sell a credit score their customer can use to more rapidly assess the likelihood that an individual will repay a given debt, based on the frequency that other individuals in similar situations have defaulted.
Who are the Major Credit Bureaus?
Equifax*, Experian* and TransUnion* are the three major credit bureaus in the United States and are typically referred to as “the bureaus.” Most large financial institutions report to one or more of the three bureaus.
Where do Credit Bureaus obtain their consumer credit information?
Credit bureaus obtain your credit data from financial institutions such as banks, finance companies, credit card companies, mortgage lenders, etc., known as “information furnishers.” These information furnishers, or more simply referred to as “creditors”, currently, or have previously, extended credit to you such as an auto loan, credit card, mortgage or a student loan. Creditors voluntarily report your account data and payment history in an automated fashion and on a regular basis, often monthly, but in some cases less frequently. Credit bureaus do not verify the credit information furnished to them before attaching it to your credit file. It is up to the creditor to transmit the correct data about your accounts.
Credit bureaus also receive information on collection accounts, charge-offs and other types of bad debt accounts. Many times the original credit grantors do not report positive data to the credit bureaus, but if the account goes into collection or is placed with a collection agency, the collection may be reported to the credit bureaus.
Credit bureaus also gather public record information that is not reported to them voluntarily such as tax liens, judgments, or bankruptcy information.
Why isn’t my bureau credit report the same from all three of the credit bureaus?
Creditors do not always report to all three bureaus, so each bureau may have somewhat different information on any one individual. Additionally, a creditor who reports to more than one bureau may deliver updated account information to different bureaus at different times, resulting in each bureau having different information at any given time.
What is the Fair Credit Reporting Act (FCRA)?
The FCRA is a Federal Law that regulates how consumer credit information is collected, used and shared. FCRA specifies separate responsibilities for credit reporting agencies (CRAs) and “information furnishers”, the creditors or businesses or agencies which furnish them with information used to create consumer credit reports. These responsibilities are designed to ensure accuracy fairness and privacy of the information contained in your credit report. The FCRA was designed to ensure that CRAs furnish correct and complete information to businesses to use when evaluating your application. To help ensure the information is correct and complete the Act ensures that consumers can check their own reports and make changes to them if necessary.
What is the Fair and Accurate Credit Transaction Act (FACTA)?
The FACTA is an amendment to the FCRA that was added primarily to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal, and limits the ways consumer information can be shared. FACTA also allows consumers to request and obtain a free credit report once every twelve months from each of the three nationwide consumer credit reporting bureaus (Equifax, Experian and TransUnion).
What is the Equal Credit Opportunity Act (ECOA)?
The ECOA is a federal law, monitored and enforced by the Federal Trade Commission, to ensure all individuals are given an equal chance to obtain credit. Factors such as income, expenses, debt, and credit history are considerations for creditworthiness. ECOA requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance.
Who is the National Consumer Reporting Association (NCRA)?
Formally known as the National Credit Reporting Association, the NCRA is a national trade organization of consumer reporting agencies (CRAs) and associated professionals that provide products and services to hundreds of thousands of credit grantors, employers, landlords and other types of businesses that rely on information contained in consumer reports. Headquartered in Bloomingdale, Illinois, NCRA serves members in the United States and Puerto Rico. NCRA's membership includes mortgage credit reporting agencies, credit verifications companies, employment screening companies, tenant screening companies, consultants and a variety of affiliate vendors.
Members must agree to comply with all federal and state applicable laws, including the FCRA, FACTA and the Gramm-Leach-Bliley Act. Members must also adhere to the standards established in the NCRA Code of Ethics, as well as other standards and guidelines developed by NCRA. These standards ensure that NCRA’s credit reporting members operate only under the highest standards of integrity and business practices.
NCRA's members are committed to sound ethical business practices. For more information you can visit www.ncrainc.org
Who is the Consumer Financial Protection Bureau (CFPB)?
The Consumer Financial Protection Bureau (CFPB) is an independent Federal bureau operating within the Federal Reserve System. Its primary purpose is to implement, and where applicable, enforce consumer financial law to ensure that markets for consumer financial products and services are fair, transparent, and competitive. In its role, the CFPB will interpret, implement and enforce Federal consumer financial laws, monitor the financial marketplace and review business practices to ensure that financial services providers are following the law.
The CFPB also has rule-making authority over certain Federal laws with privacy implications and/or consumer protection regulations, such as the Fair Credit Reporting Act (FCRA), the Equal Credit Opportunity Act (ECOA), the Real Estate Settlement Procedures Act (RESPA), the Fair Debt Collection Practices Act (FDCPA), the Home Mortgage Disclosure Act (HMDA), the Truth in Lending Act (TILA), the financial privacy sections of the Gramm-Leach-Bliley Act (GLB), to name a few. The CFPB also has enforcement authority or shares enforcement authority over a host of financial industries and Federal laws.
The CFPB will not have jurisdiction over businesses that use consumer reports in connection with non-credit or deposit related transactions such as landlords; insurance; accountants and tax preparers; licensed attorneys; merchants and retailers of non-financial products and services; auto dealers who sell, service and lease motor vehicles if the financing is provided by a third party; and businesses regulated by the SEC or a state securities commission; among others.
Visit the Consumer Financial Protection Bureau at http://www.consumerfinance.gov/.
Who is the Federal Trade Commission (FTC)?
The Federal Trade Commission was established in 1914 as the nation’s consumer protection agency. Its principal mission has been the promotion of consumer protection; the elimination and prevention of harmfully anti-competitive business practices and unfair or deceptive business practices in commerce; and increasingly, consumer privacy, identity theft and data protection in the private sector. In July 2011, the Dodd-Frank Act transferred the consumer protection functions of the FTC to the new Consumer Financial Protection Bureau. Rulemaking and enforcement authority over consumer protection for non-bank institutions and businesses, such as auto dealers and landlords, is retained by the FTC.
Visit the Federal Trade Commission at http://www.ftc.gov/.
Consumer Financial Protection Bureau
The CFPB is currently accepting complaints on credit cards.
Credit card complaint line: 1(855)-411-CFPB (2372)
Federal Trade Commission
Consumer Response Center
Washington, DC 20580
1-877-FTC-HELP (1-877-382-4357); TDD: 1-866-653-4261
The FTC generally does not intervene in individual disputes, but the information you provide may indicate a pattern of violations that the commission would investigate.
For nationally charted banks (“National” or “N.A.” will be part of the name):
Comptroller of the Currency
Consumer Assistance Group
1301 McKinney Street
Houston, TX 77010-9050
For state-chartered banks insured by the Federal Deposit Insurance Corporation, but not members of the Federal Reserve System:
Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Boulevard
Kansas City, MO 64108
For federally chartered or federally insured savings and loans:
Office of Thrift Supervision
1700 G Street NW
Washington, DC 20552
1-800-842-6929; TTY: 800-877-8339
For federally chartered credit unions:
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3437
For state member banks of the Federal Reserve System:
Federal Reserve Consumer Help Center
P.O. Box 1200
Minneapolis, MN 55480
1-888-851-1920; TDD: 877-766-8533
For discrimination complaints against all kinds of creditors:
Department of Justice
Civil Rights Division
Washington, DC 20530
Still Not Sure Who to Contact?
If you can’t figure out which federal agency has responsibility for the financial institution you dealt with, visit www.federalreserveconsumerhelp.gov or call 1-888-851-1920.
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