Legal Definitions - credit reporting agency

A credit reporting agency, also known as a credit bureau or credit agency, is a private company that collects and sells information about a person or corporation's debt, repayment history, and identifying information. This information is used to create credit reports and credit scores that indicate the creditworthiness of each person or corporation.

Credit reports are sold to qualified extenders of credit or to those for whom a would-be debtor has executed a release. Credit reports and scores are used by banks, mortgage lenders, credit card companies, landlords, and potential employers to screen applicants.

The three major credit reporting agencies - Equifax, Experian, and TransUnion - are regulated by the federal Fair Credit Reporting Act and are members of the Associated Credit Bureaus of America.

• When you apply for a credit card, the credit card company will request a credit report from a credit reporting agency to determine if you are a good candidate for their card.
• When you apply for a mortgage, the bank will request a credit report from a credit reporting agency to determine if you are a good candidate for a loan.
• When you apply for a job, the potential employer may request a credit report from a credit reporting agency to determine if you are financially responsible.

These examples illustrate how credit reporting agencies collect and sell information about a person's credit history and how that information is used by various entities to make decisions about extending credit or offering employment opportunities.