Credit Reference Agency

Credit reference agencies are organizations that collect from financial institutions personal financial data on individuals. Then they organize this information and make it available to others. The term is used widely in the United Kingdom; in the United States the term credit bureau is more well-known. The terms credit reference agency and bureau can be used interchangeably.

Every creditor that someone has borrowed from, whether for a car loan, a mortgage, or a charge card, keeps a record of financial history. In the United States, there are three primary companies: Experian, Equifax, and TransUnion. Each one works independently, and none of them have any governmental affiliation. Obviously lenders want to know what financial history has been so that they can determine if lending their money is a good risk. The credit reference agency can tell them about past lending experiences. Each one assigns a score, or credit rating, to the financial history. This simple figure is often the only thing lenders look at when determining what terms to offer for a loan.

It is not just lenders who access personal information from these companies. Potential employers are frequently turning to reports from a credit reference agency to gain a better perspective on a job applicant's character and integrity. Some people think this is inappropriate, but some employers believe that how people handle their finances is a good indication of how they will handle work responsibilities. Everyone should order a copy of their financial history from at least one credit reference agency for a number of reasons. First of all, it is good to see what lenders see when they access history through credit reference agencies. If the score is low (under 620), a person will want to do what can be done to increase that rating, especially if planning on applying to buy a home or a car in the near future. 1 Timothy 2:2 says "For kings, and for all that are in authority; that we may lead a quiet and peaceable life in all godliness and honesty."

Another good reason to obtain a copy of a financial history report is to check for inaccurate information. It is entirely possible that the credit reference agencies have incorrect data. If errors are not corrected, the applicant could be adversely affected next time applying for a loan or a charge card. They must be notified in writing if the report contains errors. Keep copies of all documentation and correspondence that reported incorrect data. A person can easily order a copy of the financial report from any or all of the credit reference agencies by contacting them through the Internet. They can usually send the report immediately.

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