The Three Credit Repositories Part 1

When a consumer applies for credit, most businesses such as auto dealers or mortgage companies can quickly and easily retrieve a suprisingly large amount of personal data.

Basically, a government license gives the three big repositories the authority to gather more personal information than the public should feel comfortable with. Recently, there has been many complaints about the Patriot act, when all along the three big credit agencies send personal information through a multitude of unsecure channels.

The names of the three main repositories of consumer information are- Transunion, Beacon and Equifax.

Anyone with access to the credit reporting software in their organization, can dig up your personal data. All one needs is your name, address and social security number. Theoretically the requestor is supposed to have a written authorization but in most cases does not. Authorizations may also be verbal (Imagine that).

The retailer pulls a borrowers credit information from any number of sub-agencies, which in turn directly communicate with the big three to gather the needed data. There exists a giant industry full of these little credit merchants, and the competition is fierce. Since the competition is so fierce, many of the information providers prefer to sign up as many clients as possible with little consideration for security. There are basic requirements for the person or entity initiating the credit vendor agreement, but from that point the security is lost. The person signing the agreement is rarely the only individual pulling credit reports. Almost anyone in the chain can begin pulling reports.

With one of these credit reports someone can find out; employment information, date of birth, past residences, existing open credit lines and much more.

A mortgage company usually pulls a borrowers credit using whats called a Tri-Merge report. This means that the pulling entity wants all data and scores from the three big agencies at the same time. The alternative would be a single merge wherein the entity requests a score from one of the repositories, usually Transunion due to TU's lower more conservative score model.

You would think, with all this sensitive data transfer, would come very strict standards for pulling credit. Unfortunetly there are no standards other than the willingness to sign up and pay the bill.

Who's pulling your credit?

In part two we'll discuss what makes a good credit score.

Gil Kerbashian Real Estate Loans and Reverse Mortgage Consulting