U.S. credit bureaus collect personal information
and financial data from a variety of sources,
including creditors, lenders, utilities, debt
collection agencies, and the courts. These data are
aggregated and stored in massive databases
maintained by the credit bureaus. The credit
bureaus then sell this information to other
companies to use for credit assessment.
The credit bureaus claim they know which
credit cards are in each consumer’s wallet, how
much is due on the mortgage, and whether the
electric bill is paid on time. But if the wrong
information gets into their systems, whether
through identity theft or errors transmitted by
creditors, watch out! Untangling the mess can be
almost impossible.
The bureaus understand the importance of
providing accurate information to both lenders and
consumers. But they also recognize that their own
systems are responsible for many credit-report
errors. Some mistakes occur because of the
procedures for matching loans to individual credit
reports.