Do you lend someone money without considering his ability/records to repay the debt? Absolutely not. If you ever did so, let me tell you that you really risked your cash. But the banks, companies, insurance companies and landlords are more conscious about their money when they take the same risk (probably with bigger sum of money) when providing loans to people for financing cars, purchasing house or paying for the education. Therefore, they meticulously examine the financial history of every borrower.

Though there are many credit rating agencies (CRAs), more than 90% of lenders consider the credit reports by big three – Experian, TransUnion and Equifax. They collect your financial information from banks, credit card companies, companies and other lenders to prepare a credit report which assigns you a three digits credit score. According to Fair Credit Reporting Act, 1971, consumers in the United States have free access to their credit reports once a year from all the three credit bureaus. These three are the fierce competitors and they never share any information with each other.

Let’s get into details of how each one of them works.

Experian

It is Ireland-based credit bureau with strong foothold in 36 countries. It was founded in Nottingham as CCN Systems in 1980. Experian has two divisions – personal credit and business credit. All the lending institutions and other creditors send a monthly report about every individual consumer to Experian. It also scours every possible public record, payment history, bankruptcy, foreclosure, etc.

Experian database maintains credit information of 220 million Americans. In June 2010, it purchased RentBureau and merged its rental payment records of 7 million US people with Experian US consumer credit.

Though the Fair Credit Reporting Act, 1971 has entitled consumers to receive their credit report once a year without any fee, Experian leaves no stone unturned to promote FreeCreditReport. com, its for-profit credit reporting arm.

Equifax

Equifax is an international credit information supplier headquartered in Atlanta, Georgia. It is the oldest of the top three credit bureaus and has information about a large number of credit holders – 400 million people around the world.

It was earlier known as Retail Credit Company, which had every information about people including facts, jobs, financial status, sex life, marital troubles, childhood, political activities and almost every phase of an individual’s life. Retail Credit Company was heavily criticized for openly selling the personal information of people to anyone for money. It was due to the misdeeds of Retail Credit Company that US Congress decided to enact Fair Credit Reporting Act in 1971. Then, the RCC changed its name to Equifax in 1975 in a hope to improve its public image.

Equifax, like Experian, operates in personal as well as business credit. Since both the divisions are independent of each other, there is no possibility of cross-referencing between your personal and business credit profile. It sells consumer credit, insurance reports, business credit reports, software and analytics to a wide range of buyers.

TransUnion

TransUnion is one of the top three credit bureaus in the United States. It was established in 1968 and today the company has 250 offices globally with headquarters in Chicago, Illinois. In July 2011, TransUnion filed an Initial Public Offering to raise $325 million to expand its operations.

It has strong capabilities in fraud management, preventing identity theft, collections management and risk management. TransUnion directly sells consumer credit information.

In 2003, TransUnion had to pay $5.3 million to Judy Thomas, a resident of Oregon, in a suit that it took her six years to get an erroneous credit report corrected.

These agencies set a benchmark of credit reporting and over 90% of all the American creditors use their reports to make important decisions. If you notice any error on your credit report, contact them in a friendly manner, screaming through mobile phone may result into your account being flagged. They are also concerned about correct reporting because that’s their only way to maintain trust of creditors.

How Do They Earn Revenues?

Credit bureaus compile consumer information and sell it to potential creditors. The lenders use this information to make decisions whether or not to lend you money based on your past financial records.

When these greedy agencies were not satisfied by selling your private information to just lenders, they wanted to expand their client base. They targeted potential employers. Now the credit bureaus began to earn money not only when you seek loan or credit cards, but also every time you apply for a job. The employers now purchase credit records of every job applicant.

The credit reporting agencies are private corporations. In order to please their shareholders and entice the investors, they need to increase revenues every year and earn more profits. So these agencies went to property management firms to woo them, now when you need to rent an apartment, the landlord will check your credit score.

The credit bureaus realized that they can fetch more cash by making credit report necessary in every aspect of people’s life. Hence, they went on to negotiating with the auto insurers to make credit reports necessary in auto insurance. Now the insurance premiums are not decided by how perfect and clean your driving record is, it has all become a game of credit score. The insurance companies pay credit bureaus to obtain your credit record, and charge you higher premium if your credit score happens to be low, no matter you are the safest driver in the world! It’s a win-win for both giants – the credit bureau and insurance company.

That’s not all. These firms also earn revenues by selling your personal information to solicitors who, by using this, send you different spammy offers. In short, credit reporting agencies earn revenues by selling your personal and financial information, no matter who the buyer is. Many times in the past all the three agencies have been dragged to court and fined heavily for selling the credit report to people instead of giving them free access to their credit report.

Empower – Educate – Take Action

H & I Credit Solutions

Have you heard about the OCR? No, it doesn’t stand for the Office for Civil Rights. The OCR that I’m talking about has to do with credit bureaus. The OCR (Optical Character Recognition) is used by credit reporting agencies as a way to scan dispute letters and categorize them properly. This system can be very problematic to the consumer who wants to challenge items that are reporting in their credit report.

Let’s look at what the OCR provides to the credit bureaus:

• OCR will reduce the chance for human error
• OCR may cut down on staffing cost
• OCR may be able to pull fingerprints to store in a database
• OCR can detect if a similar dispute letter has been used before
• OCR can analyze the letter and can assign an E-Oscar dispute code
• OCR can eliminate human investigation processes

As you can see from a business stand point, the OCR provides a huge benefit to the credit bureaus by allowing them to automate the dispute and investigation process. This software can even flag disputes as frivolous and has the capability to send automatic responses.

Let’s paint a picture. You’re ready to start cleaning up your credit and challenging negative items on your credit report. You purchase a DIY or dummy book on credit repair that cost you 5 or 10 dollars. You open the book and you find a letter to address those collection accounts that you have on your report. You copy the form letter just as it instructs you to do, fill out the company name, place your name on it and mail it off. Let’s say that 100,000 people used the same form letter for credit repair disputes. The OCR would immediately flag this as frivolous because of the amount of letters that are being sent that look the exact same.

A lot of credit repair companies will use similar form letters and pretty much all credit repair books will tell you to use form letters. If you use a form letter you are setting yourself up for failure before you even walk out your door and mail it. It is so important to know how to perform proper credit repair the right way. The truth is, very few credit repair companies know how to get around the OCR or even take the time to understand how it works. The result of this is, temporary results and repeat customers, if, the consumer comes back. The credit repair companies that do know the secrets will never tell you and will never share the formula they use.

There is hope; H & I Credit Solutions is doing something that has never been done before. We are exposing and unleashing the same tactics that we use to get amazing results for our clients, and putting this information directly in your hands. You can find out exactly how we beat the OCR and blast away large numbers of negative items in a very short amount of time.

You only need one resource to teach you exactly how to do it and that is our book titles “Kick Your Bad Credit to the Curb – Industry Secrets You Will Never Learn Online”.

The OCR is very tricky, with the proper understanding and knowledge, you will beat the OCR system. You will succeed and start enjoying a better life.

Empower – Educate – Take Action

H & I Credit Solutions

If you have had dealings with the credit bureaus you know that they can be very sneaky and demanding. Credit bureaus have a process that they use in order to process disputes, and you have to play by the rules in order to get the best results. When you dispute an item or items on your credit report you may receive several different responses from the credit bureaus.

Typical responses are listed below:

• We are processing your dispute
• We have received your dispute and are investigating the items you listed
• We have finished our investigation and the results are listed below
• We are unable to process your dispute because proper verification as not been met
• Please provide the required forms of identification in order to process your dispute

You may receive one of the five responses above when you start your journey in repairing your credit. You must know how to handle the last two stall tactics. Stall tactics are used by the credit bureaus in order to by time and discourage consumers. Imagine if you knew nothing about the process and you received a letter from a scary “Credit Bureau”, you may either send in the requested information or feel like they are going to find out that you’re not telling the truth. This type of tactic is very powerful when dealing with consumers as many will just give up and continue to feel helpless.

The credit bureaus have a habit of sending a response like the following:

Dear consumer,

We have determined that your dispute in fraudulent. We will not investigate this item again. If you have anymore concerns……..

Or,

Dear Consumer,

We have determined that your dispute has not been initiated by you and could have possibly been sent by a credit repair company. It is illegal to use a credit repair company………….

How do you get around these stall tactics? There are 5 items you will need to send in when you are repairing your credit. These items are a must in order to not get road blocked by the credit bureaus.

1. Dispute letter
2. Copy of your ID
3. Copy of your Social Security Card
4. Copy of a recent utility bill
5. Copy of your recent paycheck stub (black out the amounts)

Sending in these items will allow you to have more success. Do not get intimidated when dealing with the credit bureaus, even though they make money on processing your dispute they are not your friends.

Empower – Educate – Take Action

H & I Credit Solutions

There is a simple thought that, if a company pulls your credit report then they should be reporting to the credit bureaus. This however, is not all true. Some companies pull your credit report just to verify your spending habits, longevity of employment, or if you are responsible with your financial commitments. Just because a company pulls your credit report does not mean that they will report to the credit bureaus. Examples of these companies include cell phone carriers, utility companies, car insurance companies, and cable / satellite services.

If you rent a residence and you monitor your credit report, you may see your rental management company on Experian.

Since January of 2011 apartment management companies are starting to report history and payment status to Experian.

This could be a great thing, or, it could be a really bad thing. The really bad thing about it is, if you are late on your apartment payments this could plummet your credit score into the ground. For a long time, renters have voiced their opinion about rental properties not reporting and about how unfair it has been. Now, renters may be saying the exact opposite. As you may already know, one slight change to your credit report could affect it in a positive or negative way.

If you have a tendency to constantly be late on your rent, this is a very bad thing.

However, if you are always on time with your apartment payments this could be a huge benefit in increasing your credit score. Think of it this way, if you are trying to purchase a house and your middle score is Experian, rental reporting could increase your middle score high enough to purchase a house.

Keep in mind that not all rental management companies are set up to report to Experian. I would ask the management office if they do, and if so, you may either be excited, or, you may need to find somewhere else to live.

Empower – Educate – Take Action

H & I Credit Solutions

Here is a bit of a history lesson on the credit bureaus. Along time ago businesses needed a way to find out if you were a trustworthy individual to extend credit too. Of course, everything was more face value back then.

These businesses needed a way to really find out how these people were when they were behind closed doors. In the early 1900’s there was a committee formed called the Welcome Wagon.

The Welcome Wagon was made up of 3 to 4 ladies that would go around and Welcome new home owners to the neighborhood. While they were welcoming the new people they actually had a hidden agenda. During their Welcoming meeting they would take note of what your house looked like, your furniture, your T.V., your kids, how you dress, what your husband or wife does, even how you eat.

These ladies would then go back and report their findings to what we know today as the Credit Bureaus. These ladies actually worked for the Credit Bureaus to investigate people in the city. Now how would you feel about your credit worthiness being dictated by someone’s opinion?

Well, guess what, you are already allowing this to happen by not monitoring your credit report. You are allowing creditors and collection agencies to report you as they see fit, and not follow the LAW!

Empower – Educate – Take Action

H & I Credit Solutions