Credit Reporting Agencies

Fiscal Fitness Part II — Understanding the “Big Three” Credit Reporting Agencies

This second article in our Fiscal Fitness series outlines the basics of how the “big three” credit reporting agencies (CRAs) work. Understanding how CRAs impact your credit score is another great step to take in keeping your credit in shape.

1. Who are the credit reporting agencies?

The three largest U.S. credit reporting agencies— Experian, TransUnion and Equifax — are known as the “big three.” Their two-fold function is to collect information about consumers and report it to lending institutions and other creditors upon request. CRAs are mysterious entities to many consumers. You know they exist and how they can affect you. But how can you work with them and take an active role in maintaining a good credit score?

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Your credit score and housing

Planning to Rent a House or Apartment? Check Your Credit Report First

Your credit score can affect your life in ways you may not have considered. Beyond its impact on your ability to get a loan or a mortgage, your credit score can be a determining factor in renting a house or apartment. Whereas landlords used to rely on their instincts when deciding whether or not to rent to you, online tenant screening programs have now made it easy and affordable to conduct tenant background checks that generally include a credit report. Primarily they are looking for negative entries that show you may not be a responsible tenant in terms of keeping up with monthly payments, such as rent. They will also check to ensure that the name, current address and employer listed on your rental application match what is on your credit report.

If you want to make a good impression on a potential landlord, you should start by getting your credit report in order.

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