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You Will Never Believe These Bizarre Truth Behind 3 Credit Bureaus | 3 credit bureaus

Credit bureaus are basically the gateways to your good credit. They collect and keep track of your credit report and score, and provide that data to lenders that request it for approval. These companies then take information that they're given by lending institutions, such as payment history on existing loans, current level of balance, date and time of past due status, and perhaps even social security number(s), and apply a proprietary formula so….

Lenders use the information they're supplied with from credit bureaus to determine whether or not you are worthy of a loan. Lending institutions are only interested in two things when it comes to you as a potential borrower. Those things are your ability to pay back the money they loan you, and the possibility of you defaulting on that loan. Your credit scores are basically the gold mines of the lending world. What they want to know about you is what factors lead to those two factors.

That's where the 3 credit bureaus come into play. These companies gather information from all of the reporting bureaus and make their own, unique scores for consumers. The three bureaus that these scores are come from are; Equifax, Experian and Trans Union. All three of these agencies have in store a database that contains pertinent information from all of your past financial experiences.

These scores, although they may be different from one agency to another, are remarkably similar in nature. Each bureau will ask some basic questions regarding your personal history. You'll probably answer yes to some of these questions when you apply for credit in general. The purpose of these questions is to get an idea of how responsible you are with your finances, what kind of debt do you have, and what kind of payment habits you have. These details are then included in your overall FICO scores. Once these data points have been compiled into your profile, these three credit bureaus will then allow you to look at them to see if they match your profile.

If your answers match what is in the report, you'll be given a positive score. This is the beginning of the lenders getting to know you. If however, you answer negatively for any reason, the lenders will find something else to go on your report. The three credit bureaus use different criteria when calculating your scores, so it's important that you look over all of their criteria before comparing lenders.

Once you've looked through all of the criteria that the three bureaus use to calculate your scores, compare lenders by the interest rates that they offer. The least expensive rate might not necessarily be the best rate. Also keep an eye out for hidden fees. Many times, these hidden fees will make your monthly payments higher than you were led to believe.

Finally, you can request copies of your credit reports from all three agencies. You can then read over them with a fine tooth comb, looking for discrepancies and errors. If you find errors, contact the reporting bureau immediately and have them fix the error. Any errors in your reports will negatively impact your scores.

It may take some time to find one or two errors, but don't give up hope just yet. Keep looking until all of the errors have been removed. Also check your three credit reports often to make sure there isn't another mistake hiding somewhere. The more information you have about lenders, the better your chances are of getting a good loan. Once you've taken the time to work on your credit scores, you'll find it much easier to shop for loans.

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