What Are The Major Credit Reporting Bureaus?

“What Are The Major Credit Reporting Bureaus?” written by Mike Marko

Planning on getting a credit report for your tenant screening but don’t know where to get one?

Credit reports are usually provided by the three major credit reporting bureaus. These bureaus are the main sources of any credit reporting company. That is why in the most basic sense, getting a credit report from the three credit bureaus is a better option.

But… it is still important that you understand what these credit bureaus are all about. That’s why in this article I will talk to you about the three major credit reporting bureaus.

Learning More About Major Credit Reporting Bureaus

As a property manager, it’s important to know where you can request the credit reports of your prospective tenants.

There are many companies that can provide you with credit reports. However, most of these companies use the 3 major credit bureaus to get their financial informationThe main sources of information are Experian, Equifax, and the TransUnion.

These three companies are called the three major credit reporting bureaus. All 3 companies have the most established relationship with Banks, Financial Credit Institutions, and Government Tax and reporting systems. They can provide the most detailed and accurate credit reports and credit scores of an applicant or a prospective tenant.

To give you more knowledge, here are the important information that you need to know about the credit reporting bureaus.

What Are The Credit Reporting Bureaus

Credit reporting bureaus are companies that gather information about a person’s credit activity, financial history, and detailed activity when using credit. All these details and activities are compiled into a document called a credit report that can be purchased to determine creditworthiness if you were to rent a property to them.

Most property managers order credit reports of their applying tenants from the three major credit reporting bureaus which are Experian, Equifax, and The TransUnion. The three major credit reporting bureaus are the most trusted credit reporting agencies because they provide the most detailed and accurate credit reports and credit scores of an applicant or a prospective tenant.

The three credit reporting bureaus provide information and other analytical tools that are useful in evaluating every possible tenant. Many institutions or individuals such as banks, mortgage lenders, credit card companies, and other financing companies are also using their services in choosing the right clients.

The credit reporting bureaus are not owned by the government and they are separate entities. The relationships of sharing information and financial histories on individuals with most banking and financial institutions in the country are second to none.

Each company operates independently of each other. They do not share a person’s account information so it is a benefit to get a credit report that has all 3 credit bureaus information and scores.

What You Need To Know About Credit Reporting Bureaus

As the property manager, you should consider using the services of the three major credit reporting bureaus. They can help you in choosing the right tenants for your property. Ordering credit report from the bureaus is currently the most convenient way of pulling credit reports of every possible tenant in the United States.

The 3 credit bureaus gather information about your applicant’s credit activities from different institutions and companies. All of the information that is gathered and shared in the process will only be disclosed to its requester with the proper authorizations. The information that will be presented by the credit reporting bureau is confidential and its requester will be the one who’s going to be responsible if it’s leaked or used in illegal activities. Once all of the important and necessary information about the applicant’s credit history and activities are gathered it is compiled it into a document called the credit report.

The credit report is transferred online and can be immediately sent to its requester saving time and money for the requestor. Each of the 3 credit reporting bureaus is not owned by the government so their services for compiling a credit report is offered for a certain amount of money. The usual price for a single credit report ranges from $15.00 to $30.00 depending on information requested. A 3 bureau credit report is often around $40 and Its price depends on the amount of information that is included in the report.

But if the price is too much for you as an individual, you are still entitled to have a free annual credit report by visiting annualcreditreport.com

However, as a property manager, the only way to offset the cost of a credit report is to charge the tenant for the background and tenant screening process that includes the cost of a credit report.

Roles of Credit Reporting Bureaus That Help Property Managers

The 3 credit bureaus are gathering various credit-related information from different financial institutions to make their credit reports detailed and accurate. The tenant’s existing credit account and payment history are some of the information they gather.  In some cases, they are also contacting businesses including telephone and utility companies to give additional information about an individual’s behavior in paying bills. Additional services offered are eviction history, identity theft, and other financial activities.

The credit report will include all of the necessary information about a person’s financial status, capabilities, and behavior in paying monthly bills. The services offered by the credit reporting bureau is useful especially to banks, credit card companies, employers, prospective landlords, lenders or property managers. The credit report gives them insight on how the borrower’s history is regarding paying and collecting monthly dues.

Information That Stays On The Credit Report

Since all of the three major credit reporting bureaus are required to give a free credit report every year, they usually keep certain information about a person.

Personal information such as an individual’s name, address, contact information is kept for a long time. Positive and negative financial information including timely payments, late payments, bankruptcies, evictions as well as healthy credit card balances will also remain in their records for a long time.

Usually, a lot of information about a person’s credit activity and history will remain on the credit report for seven years. However, negative information about a person’s credit activity will remain on their credit reports longer.

Here are examples of negative items on a credit report:

  • Bankruptcy
  • Charge-offs
  • Closed accounts
  • Collection accounts
  • Late payments
  • Judgments
  • Tax Liens

Most of this items will stay for as long as seven years except for bankruptcy and tax liens. According to the law, bankruptcy will likely stay on a person’s credit report for ten years while unpaid tax liens will appear on the credit report for fifteen years.

How To Order A Credit Report

A credit report can be ordered using mail, telephone or online. The most common and easiest way for a property manager to order a credit report is to visit the website of the credit bureau and follow the instruction on how to order a credit report. Every person has the right to order a free credit report from a credit reporting bureau annually. The free credit report can be ordered by visiting annualcreditreport.com.

A free credit report can only be ordered once a year so if a person needs to acquire another credit report, they have to pay the credit reporting bureau’s services. You should be leary or cautious when the tenant or an individual wants you to use this for evaluation. Sometimes people can fake reporting or change numbers or scores so it is our suggestion that you order a new report regardless if they present an older credit report for evaluation.

During the tenant screening process to find a qualified renter for your properties as a property manager, you can order a credit report of your tenant. However, the tenant must allow you and authorize their approval in writing first before you can do any background or credit checks on them. It’s recommended to get a written consent signed and approved from the tenant that allows you to perform the necessary background checks on them.

Final Thoughts About The Credit Reporting Bureaus

In this article, we talked about the credit reporting bureaus and how they can help you gather information about a potential renter’s credit activities and history. All of the information that they collected will be compiled into a document called credit reports.

Knowing about the credit reporting bureaus is useful if you are a property manager. It can give you an insight into the prospective tenant’s behavior in paying monthly bills. And as the property manager, you have the right to get your tenant’s credit report. Just keep in mind that you make sure that you inform your tenant about the process, as well as asking for their written consent.

Please add any questions or comments into the section below.




Suggested Articles:
1. How To Make A Rental Application Form
2. How To Make A Simple Rental Agreement
3. Learn More About Tenant Background Search

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Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this website or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.


Article: What Are The Major Credit Reporting Bureaus?

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