Legal Definitions - consumer reporting agencies (CRA)

A Consumer Reporting Agency (CRA) is a company that collects and maintains information about consumers' credit history, payment habits, and other financial behaviors. They compile this information into a report that can be used by lenders, employers, and other organizations to make decisions about whether to extend credit, offer employment, or provide other services.

There are two types of CRAs: nationwide and specialty. Nationwide CRAs collect and maintain files on consumers from across the country, while specialty CRAs focus on specific categories of records, such as medical records, residential or tenant history, check-writing history, employment history, or insurance claims.

Examples of CRAs include:

• Creditors
• Data brokers
• Collection agencies
• Check approval companies
• Attorneys
• Alternative credit bureaus

These companies gather information about consumers from a variety of sources, including credit card companies, banks, and other financial institutions. They then use this information to create reports that can be sold to other companies or used to make decisions about creditworthiness, employment, and other important matters.

For example, a lender might use a CRA's report to determine whether to approve a loan application. An employer might use a CRA's report to screen job applicants. And an insurance company might use a CRA's report to determine whether to offer coverage to a particular individual.