How Credit Reporting Agencies Work
By John Mussi, Thu Dec 8th

With all of the focus today on credit and credit scores, youmight find yourself wondering exactly how it is that your creditscore is compiled and who it is that does the compiling.

The responsibility for maintaining your credit report anddetermining your falls on the shoulders of variouscredit reporting agencies... companies that deal solely inmaintaining records of payments and non-payments for all of theindividuals that they receive reports on.

Several different credit reporting agencies exist, and differentcreditors can prefer to work with specific ones or with all ofthem.

While many people know that credit reporting agencies exist,they may not be sure as to exactly what services these agenciesperform.

Compiling Reports from Creditors

One of the major duties of credit reporting agencies is tocompile reports from creditors in order to establish a credithistory for the individuals that they receive the reports on.

Each time you make a payment on time, there is a good chancethat a positive report will be sent to at least one (andsometimes all) of the credit reporting agencies. When you misspayments, a negative report might be sent.

The credit reporting agencies compile these reports in thecredit file that holds your past reports, and the reports in thefile can stay there for years before they finally expire.

It is from these files that credit reporting agencies generateyour and create a credit report on you when it isrequested..

Calculating Credit Scores

Alongside of the compiling of reports from creditors, the creditreporting agencies are also responsible for generating yourcredit score so that potential lenders and creditors can try anddetermine how much of a credit risk you may be.

Your has the potential to change with each positiveor negative report that is received and placed into your file...positive   reports can improve your score, while negative reportsbring it down.

Since different creditors may choose to file reports withdifferent agencies, your can also vary slightlydepending upon which agency it's requested from.

For this reason it's a good idea to inquire as to whetherreports will be made regularly and to whom they'll be made whenapplying for a loan or credit line.

Issuing Credit Reports

A bit more detailed than your credit score, credit reportingagencies also produce full credit reports for those creditors oremployers who request them. These reports show your credit scoreas well as a listing of the reports that you've received over aperiod of time... this time can vary from 6 months to severalyears.

You can also request a copy of your own credit report, either byordering it from a credit agency or by applying for a freecredit report via certain government agencies (depending uponwhere you live) or credit monitoring services who in turn willtry to sell you a subscription to their service which tells youwhen changes are made to your credit report.

Investigating Report Claims

Since your credit is so important, you have the right to disputesome of the reports that are contained within your credit file.Should you request a copy of your credit report and find that itcontains errors or inaccurate information, you can contact thecredit reporting agency that issued the report and request thatthey investigate the error.

They might find that the debt or other information islegitimate, but in many cases they do find errors which are thenremoved completely from your credit history often improving yourcredit score in the process.

You may freely reprint this article provided the followingauthor's biography (including the live URL link) remains intact:

About the author:John Mussi is the founder of Direct Online Loans who helphomeowners find the best available loans via the www.directonlineloans.co.uk website.