A credit bureau is an independent organization that gathers information from lenders and other sources regarding each person's credit applications and payment history. The three nationwide credit bureaus are Equifax, Experian, and TransUnion. These bureaus receive information from banks and other businesses about an individual's recent credit history and compile this information into a credit report.
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The credit bureau does not decide whether or not a lender will extend you credit or determine the credit limit or interest rate of a loan or credit card. The credit bureau's job is to compile the information that is relevant to your credit history and supply this information to those who have a valid need to access it. The lender then uses this information to determine whether or not you meet their borrower standards.
The Fair Credit Reporting Act (FCRA) regulates how consumer reporting agencies can use your information. Under the FCRA, you have access to the information on your credit report. In fact, you are entitled to one free credit report every 12 months from each of the three major credit bureaus. Regularly monitoring this report helps you maintain healthy credit and make sure that there is no fraudulent credit activity on your report.
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