Credit score information

Credit bureau - Credit Reference Agency - CB-CRA

The credit bureau (US) or credit reference agency (UK) is a company that collects information on individual borrowers. Based on this information they generate a credit rating.
This credit information or credit rating can be accessed by the banks or other companies that want to provide a credit to a customer.

This credit rating can affect the interest rate that will be applied to the loan. Interest rates are based on a risk-based pricing system. The higher the risk a lender takes the more interest he will charge for the loan.

This is also the reason a credit card has a higher interest rate than a mortgage loan. In case of a mortgage loan, the lenders have your home as a backup because they can sell it if you don’t pay.

International issues.

Credit history is typically local to one country. Even within the same credit card network information is not shared for different countries. For example, a person who has been using Visa credit cards issued by banks in the UK or Canada for many years and then moves to the United States and immediately applies for a Visa will not be approved because of lack of credit history.

An immigrant must establish a credit history from scratch in the new country, which can take years. New immigrants are than forced to seek loans from irregular channels, which can create social problems.

United Kingdom (UK, U.K.)

In the United Kingdom there are three credit reference agencies. These are: Experian, Equifax and Callcredit.

Most banks and other credit-granting organisations subscribe to one or more of these organisations to ensure the quality of their lending. This includes companies who sell goods or services on credit such as credit card issuers, utility companies and store card issuers. Subscribing organisations are expected to provide relevant data to maintain the common data pool.

Credit reference agencies are bound by the Data Protection Act, which requires that data relating to identifiable individuals must be accurate, relevant, held for a proper purpose and not out-of-date. Individuals have a legal right to access data held on them.

The activities of Credit Reference Agencies are governed under UK law by the Consumer Credit Act 1974.

United States (USA U.S.A.)

In the USA the legal term for these credit bureaus is consumer reporting agency.
These bureaus are bound to the FCRA, FACTA and FCBA.

The three main bureaus are: Experian, Equifax and TransUnion.
These organizations are private entities and possess no governmental affiliation.

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