Is A Single National Credit Bureau Foreseeable?

A single national credit bureau is not anywhere in the immediate future in the financial world. There are well over one thousand national credit bureaus, but the three major credit bureaus are Experian, Trans Union and Equifax. These three agencies are where most companies acquire their data from when looking to obtain information on an individual. Different companies also are looking for different information from these agencies such as for mortgages, car loans or utility payments.

Mortgage Companies

Mortgage companies are reviewing your mortgage history closely. The number of late payments on your report will affect your chance to obtain a new mortgage, refinance or second mortgage.

The credit score also influences the interest rate of your loan. A lower credit score can mean higher costs for a loan. For example a good credit score will be offered a 6% rate, where a poor credit borrower will be offered 8% for the same loan. The monthly payments will be higher and the poor credit will cost the borrower a significant amount of money.

Car Loan Information

When car loan lenders are looking at your credit score they look at many things. They look at your overall ability to repay debt and how you trend to pay back debts. The credit score and the way that you pay back your debts is an indicator if you will pay back the car loan or default. Using your credit score is a much better indicator than your paystub. The lender can find if you are a person who pays your bills and set you up with the right lender. Car lenders report your loan balance and payment history to the credit agencies monthly.

Revolving Credit

Getting revolving credit whether in the form of a store credit card or a major credit card is dependent upon your credit score and how long you have had established credit. If you are just establishing credit than revolving credit can be a good way to get started. By showing that you can pay either your full balance each month or at least make your payment on time each moth you will increase the chance you have of receiving increased credit lines and better interest rates. Credit card companies report to all of the major credit bureaus on a monthly basis. Anyone who pulls your credit report today will be able to see if you made last month’s payment on time.

If any of these types of credit are sent to collection, than it is up to the collection agency to report any payments to the credit bureaus. Once it is sent to a credit collection agency even if you pay the debt in full the credit report will read paid but not as agreed. Many credit companies do not contact the initial creditor to let them know the debt was paid.

Our three bureau system is advantageous because they provide a general view and not one single view. Different agencies provide scores in different ways and my offer information that a mortgage company may want over a revolving credit card company. Having different agencies keeps people looking at credit scores and interpreting them. One agency would be able to cut down the work of some of these individuals but it also could take a system that is fair and turn it into a monopoly on an individual’s credit worthiness.

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