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The history of the Credit Bureaus

The history of the Credit Bureaus. Who are the credit reporting companies. There are three main credit bureaus that supply information to literally tens of thousands of other smaller sub-bureaus. Experian formally known as TRW renamed after being bought by a firm in England

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The history of the Credit Bureaus

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  1. The history of the Credit Bureaus

  2. Who are the credit reporting companies • There are three main credit bureaus that supply information to literally tens of thousands of other smaller sub-bureaus. • Experian • formally known as TRW • renamed after being bought by a firm in England • Equifax, formally known as CBI. • Later merged under parent company with Experian. • Trans Union

  3. Where did they come from? • Credit Bureaus started as a way for local merchants to evaluate consumers for charge accounts and protect themselves from people who would open charge accounts and not pay the bill. • Before credit bureaus came about, local stores would verify employment and banking information and then keep a file card listing the amount charged and the amount owed.

  4. Why have National Credit Bureaus? • With the advent of the automobile and broader traveling, people moved about in jobs more often and there was no way to transfer credit information easily from one state to another or from one city to another. • When you moved new creditor’s would call back to get your credit file information from a local reporting agency. • Notices • Police blotter. • Marriage license records. • Newspaper clippings

  5. The First National Bureau • Merchant Protection Association was the first interstate credit reporting company. • MPA was a system that was created that listed only negative information about consumers in order supply information to stores. • If your name was not listed on the MPA database you were considered a good candidate for credit.

  6. Experian • TRW was the first of the top three credit reporting companies to evolve out of the MPA system. • Because computers were very expensive at the time. • TRW had the infrastructure in place from their aerospace experience. • This gave them the advantage in the fledgling industry.

  7. Equifax • Equifax was traditionally an investigative company that tracked insurance information and history • Choice Point is still a product used by the auto insurance industry. • Premiums are score based. • Equifax developed their own systems for keeping credit files and developed their on computers with which to do it. • Because of the expense of renting computer space from TRW, the current leader.

  8. Trans Union • Trans Union first evolved as a credit information service available to local merchants. • After noticing the need to supply credit information Trans Union developed its own credit report system. • Because of the expense of renting computer space from TRW, the current leader. • In the process they gained a reputation of misinformation • Processes were put in place to become compliant after federal investigation revealed disparity in the information provided harms consumers.

  9. Harmless yet harmful? • A 2004 Survey by the Public Interest Research Group found that 82% of credit reports had incorrect information. • 50% had errors so significant that they could have an adverse effect on credit decisions resulting in higher interest rates. • As of September 1, 2005, the Fair and Accurate Credit Transactions Act, (amends the Fair and Accurate Credit Reporting Act) allows you to get your credit report for free from all three major Credit Bureaus (Experian, Trans Union, and Equifax) at www.annualcreditreport.com. • This is crucial because not all creditors uniformly report account information to all three bureaus, which could affect your scores

  10. Links • Credit Financial Planning, Inc. (800) 365-5553 • www.creditfixed.com • Credit Reporting Agencies • Equifax: (800) 685-1111; www.equifax.com • Experian: (888) 397-3742; www.experian.com • Trans Union: (800) 916-8800; www.transunion.com • Free Annual Report: www.annualcreditreport.com • Via mail at: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348 • Federal Trade Commission: http://www.ftc.gov

  11. If interested in learning more about an individualized program designed for your credit and financial needs, please call at your convenience. Credit Advocacy

  12. A positive up to date credit report is something you create, not something that just happens!

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