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With all of the focus today on credit and credit scores, you might find yourself wondering exactly how it is that your credit score is compiled and who it is that does the compiling. The responsibility for maintaining your credit report and determining your credit score falls on the shoulders of various credit reporting agencies… companies that deal solely in maintaining records of payments and non-payments for all of the individuals that they receive reports on.
Several different credit reporting agencies exist, and different creditors can prefer to work with specific ones or with all of them. While many people know that credit reporting agencies exist, they may not be sure as to exactly what services these agencies perform.
One of the major duties of credit reporting agencies is to compile reports from creditors in order to establish a credit history for the individuals that they receive the reports on. Each time you make a payment on time, there is a good chance that a positive report will be sent to at least one (and sometimes all) of the credit reporting agencies. When you miss payments, a negative report might be sent.
If you have been denied credit based on information in your credit report (the creditor must provide a reason for denial), you have 60 days from the day you receive a denial notice to receive a free copy of the credit report. Additionally, the law also entitles you to receive a free credit report every 12 months if you are unemployed and seeking work within the next 60 days, are on welfare or if your report is inaccurate as a result of credit fraud.
Alongside of the compiling of reports from creditors, the credit reporting agencies are also responsible for generating your credit score so that potential lenders and creditors can try and determine how much of a credit risk you may be. Your credit score has the potential to change with each positive or negative report that is received and placed into your file… positive reports can improve your score, while negative reports bring it down.