If you’re applying for a loan, your prospective lender is likely to run a credit check—this means they’re looking at your credit history.

The lender does this to determine if you’re a safe bet for a loan. The company checks your history by looking at one (or maybe more) of the credit reports kept by the Equifax, Experian, and TransUnion. The reports show your credit accounts and are the best indicator of how you handle credit and how much credit has already been extended to you.

If you’re applying for an auto loan, credit card, mortgage, or personal loan, the prospective lenders will almost certainly do a credit check. They’re trying to determine whether you make payments on time and whether you can handle borrowing more money. This kind of credit check—triggered by an application—is called a hard inquiry.

The three credit bureaus maintain their reports on millions of borrowers, getting regular updates—usually once a month—from the companies that have already loaned to you. The reports are used by Fair Isaac Corp. (FICO) and VantageScore to calculate your credit score, another critical indicator of your creditworthiness. In this article:

• How to Check Your Credit Report
• What is a soft credit check?
• What is a hard credit check?
• How are soft and hard credit checks different?
• Why are soft credit checks useful?
• What is a Credit Check Organisations
• Types of Information the Credit Check Organisations Collect
• Credit Check Organisations

How to Check Your Credit Report

You should regularly check your own credit reports from each of the three main bureaus to spot discrepancies that may affect your ability to get a loan or indicate potentially fraudulent activity. You’re entitled to get a free report from each of the bureaus once every 12 months. And you may also get a free report within 60 days of a company denying a loan application.

You can request the reports through the individual bureaus’ websites or at annualcreditreport.com, a site that’s sponsored by the bureaus as a way of fulfilling their requirement to offer the free annual reports mandated by the Fair Credit Reporting Act

If you see a mistake in a report, contact both the bureau and the lender in question and request a correction. And keep in mind that a hard inquiry by an unfamiliar lender may be a sign of fraud; notify the bureau that you have reason to believe you have been the victim of identity theft.

Each of your credit reports will be at least slightly different, so it’s important to check all of them eventually. Lenders update account information at different times, and not all lenders report every activity to all three bureaus.

And because the bureaus are actually competing, for-profit companies, they don’t routinely share information with each other. One exception is fraud alerts, which they are required to inform each other about.

What is a soft credit check?

A soft credit check is an initial look at certain information on your credit report. Companies perform soft searches to decide how successful your application would be without conducting a full examination of your credit history.

Crucially, soft searches aren’t visible to companies – so they have no impact on your credit score or any future credit applications you might make. Only you can see them on your report and it doesn’t matter how many there are.

When you compare credit cards, loans and mortgages with Experian, a soft search will be done on your report.

What is a hard credit check?

A hard credit check happens when a company makes a complete search of your credit report. Each hard check is recorded on your report, so any company searching it will be able to see that you’ve applied for credit.

Too many hard credit checks over a short period of time can affect your credit score for six months, reducing your ability to get approved for credit in the future.

If you apply for credit, the company you apply to will do a hard check of your credit report to see your suitability. But you can also be subject to a hard check from utility providers and mobile phone companies when applying to use their services.

The more credit applications you make, the more hard checks will appear on your credit report, and the greater effect it will have on your credit score and likelihood of getting credit in the future.

How are soft and hard credit checks different?

Soft credit checks aren’t visible to companies, but hard credit checks are. That means that soft credit checks won’t impact your score (no matter how many of them there are), while each hard credit check may lower your score.

Here are some examples of when a soft credit check can happen:

• You search your own credit report
• A company searches your credit report as part of an identity check
• You use Experian to compare credit and see how eligible you are

Here are some examples of when a hard credit check can happen:

• You apply for a loan, credit card or mortgage
• You apply to a utility company
• You apply for a pay-monthly mobile phone contract

Why are soft credit checks useful?

Because soft credit checks leave no trace on your credit report, you can use them to see how eligible you are for a wide range of credit without actually applying – whether you’re looking for a loan to pay for a holiday or a credit card for everyday purchases. There’s no limit to how many soft checks you can have and they’ll never affect your credit score, even if you have lots close together.

What is a Credit Check Organisations

A credit bureau or credit check organisations or credit reporting agencies (CRA) is a company that collects and maintains individual credit information and sells it to lenders, creditors, and consumers in the form of a credit report.

While there are dozens of credit check organisations across the U.S., most consumers are familiar with the big three: Equifax, Experian, and TransUnion. The biggest credit bureaus do more than just compile and report consumer credit information. They also provide dozens of solutions that help businesses make better decisions

Types of Information the Credit Check Organisations Collect

The credit bureaus maintain a number of details related to you and credit history, starting from the time you opened your first credit account. For instance, the credit bureau collects Information about credit accounts: your repayment history, the amount of credit you have available, the amount of credit you’re using, outstanding debt collections, details on public records like bankruptcy, tax liens, foreclosure, and repossession.

Credit bureaus also maintain non-credit information about you including your current and previous addresses, current and previous employers, date of birth, and your salary information if it’s available

The three major CRAs in the U.S. are Equifax, Experian, and TransUnion, and they are all publicly-traded, for-profit companies. There are other smaller, specialized agencies, but when creditors and lenders check your credit, they’ll very likely do so with one of the major CRAs.

Governing the Credit Reporting Agencies

The federal government has legislation—the Fair Credit Reporting Act (FCRA)—that regulates how these and other credit bureaus can and must operate. They’re monitored by the Federal Trade Commission because they handle sensitive information for millions of citizens.

CRAs can only provide information and analytical tools to help businesses make decisions about whether to offer you credit and what sort of interest rate they should charge you. The bureaus themselves don’t make these decisions.

Credit Reporting Agencies Are Separate Entities 

Credit bureaus often have business relationships with the same banks, credit card issuers, and even other businesses that you might have accounts with, but they’re separate entities. Your account history will appear on one or all of your credit reports from these agencies because of their connections, but credit agencies don’t share your account information with each other. Credit freezes and fraud alerts are exceptions to this rule.

Your creditors might report to all three of the major CRAs or just one or two of them, so the information contained on one credit report may be different from the others. When potential creditors and lenders check your credit, they might only pull one agency’s report because it’s usually less expensive for a business to check just one credit report. It’s important that you review your reports from all three CRAs once a year to ensure that everything is correct. 

Credit Check Organisations

Experian

Experian got its start in London when businesspeople there began sharing information on customers who did not pay their bills. These businesspeople formed the Manchester Guardian Society in 1826, which later became an integral part of Experian and reached around the world.

Experian employs over 16,500 people in 39 countries and was named one of the “World’s Most Innovative Companies” by Forbes in 2018.

Experian uses the FICO 8 credit score calculation system and offers a Credit Tracker by subscription. You’ll get your credit score as well as your credit report if you subscribe for $19.99 per month.

Equifax

Equifax has been around since 1899, and they operate or have investments in 24 countries. They offer credit fraud protection and identity theft protection to consumers, as well as selling credit reports to businesses. Consumers can purchase credit monitoring services that include their Equifax credit scores.

In 2017, Equifax’s reputation was blemished when it was hacked and suffered a data breach that divulged the critical personal information of 147 million consumers.

Equifax has since made a tool available on its site where you can check to see if you were affected, and the company also tried to make amends by offering a free credit monitoring service to consumers whose information was breached

TransUnion

TransUnion started as a holding company for a tank car company in 1968, and then it branched out from there into credit reporting. By 1988, the company had full coverage and consumer information on every market-active adult in the U.S. Their database includes over 1 billion consumers in more than 30 countries.

If you’re worried that you’re a victim of identity theft or that you might be, you can place a freeze on your TransUnion credit report and TransUnion will take the extra step of notifying the other two CRAs that you’ve done so. You can also purchase a credit monitoring subscription with them for $24.95 per month

Credit Sesame

Credit Sesame is a credit and loan company. Credit Sesame was launched in private beta at TechCrunchDisrupt 2010. By 2012, the company claimed to monitor almost $35 billion in loans.

As of 2018, Credit Sesame gives its members free access to credit score monitoring, credit reports, and identity protection tools. It also provides personalized recommendations regarding personal loans, home loans, student loans, credit cards, and refinancing opportunities that can help members improve their credit and spending power. In 2017, Credit Sesame announced new robo advisory technology for consumers to automate their credit and loan management.

The credit score you see on Credit Sesame is based on the VantageScore® 3.0 scoring model and provided by TransUnion. It is a real credit score, and it is not the TransUnion Risk Score, which is a score that was merely an educational credit score and not used by lenders

FICO

FICO originally Fair, Isaac and Company, is a data analytics company based in San Jose, California focused on credit scoring services. It was founded by Bill Fair and Earl Isaac in 1956. Its FICO score, a measure of consumer credit risk, has become a fixture of consumer lending in the United States.

In 2013, lenders purchased more than 10 billion FICO scores and about 30 million American consumers accessed their scores themselves.

What Is a FICO Score?

A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit.

FICO scores take into account various factors in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts.

FICO scores range between 300 and 850. In general, scores above 650 indicate a very good credit history. In contrast, individuals with scores below 620 often find it difficult to obtain financing at favorable rates. 

To determine creditworthiness, lenders take a borrower’s FICO score into account but also consider other details such as income, how long the borrower has been at his job, and the type of credit requested

More banks and lenders use FICO to make credit decisions than any other scoring or reporting model. Although borrowers can explain negative items in their credit report, the fact remains that having a low FICO score is a deal-breaker with numerous lenders.

Many lenders, particularly in the mortgage industry, maintain hard-and-fast FICO minimums for approval. One point below this threshold results in a denial. Therefore, a strong argument exists that borrowers should prioritize FICO above all bureaus when trying to build or improve credit.

Achieving a high FICO score requires having a mix of credit accounts and maintaining an excellent payment history. Borrowers should also show restraint by keeping their credit card balances well below their limits. Maxing out credit cards, paying late, and applying for new credit haphazardly are all things that lower FICO scores.

Dun & Bradstreet

Dun & Bradstreet is a corporation that offers information on commercial credit as well as reports on businesses. Most notably, Dun & Bradstreet is recognizable for its Data Universal Numbering System (DUNS numbers); these generate business information reports for more than 100 million companies around the globe. Dun & Bradstreet was established as the result of a merger in the 1930s between R.G. Dun & Co. and the Bradstreet Cos.

Dun & Bradstreet has been a foundation for the way businesses function for more than 160 years. The company’s revolutionary DUNS numbers are intricately linked to the categorization of businesses around the world. Dun & Bradstreet offers a number of other products and services and has continued to expand since its founding.

The company offers a wide range of products and services for risk and finance, operations and supply, and sales and marketing professionals, as well as research and insights on global business issues, serving customers in government and industries such as communications, technology, strategic financial services, and retail/telecommunications/manufacturing markets. Often referred to as D&B, the company’s database contains more than 265 million business records worldwide

Credit Karma

Credit Karma is a fintech services company. Unlike some companies in the industry, Credit Karma and its immediate competitors do not sell your data to third parties. In addition to providing credit scores, Credit Karma also guides consumers regarding what next steps to take after they have accessed their initial credit information.

For example, the company recommends credit cards that are tailored to each consumer based on the odds of approval. It also provides users with guidance about tailored personal, home, and auto loans based on income and credit scores.

Credit Karma offers consumers access to credit scores and other credit information from TransUnion and Equifax, as well as tools for consumers to improve their rating. Users can access Credit Karma’s information for free and as frequently as they desire, without registering with a credit card.

By contrast, the three major credit bureaus provide complete credit score information for free to consumers only once a year, charging a fee for added requests. Credit Karma makes money by recommending financial products such as credit cards based on your credit information, and gets a commission if you buy a recommended product.

Credit Karma recently has expanded by offering free tax preparation assistance as well as a high-yield savings account through a partnership with MVB Bank

Clearscore

ClearScore is a financial technology business that gives customers in Australia, India, South Africa and the UK free access to their credit score and report. It was incorporated in 2015 by Justin Basini (CEO), Dan Cobley and Nigel Morris. It is headquartered in London and has over 12 million users worldwide as of February 2020.

Clearscore reports are provided by Equifax (one of the 3 main credit reference agencies in the UK).

ClearScore is one of the growing FinTech businesses in the UK. The company’re rapidly developing, aiming to change the way people manage their finances – starting with their credit score and report.

People’s credit report and score is like a financial CV covering many of their financial accounts such as credit cards, loans and mortgages. Taking control of this is important to their financial well being, ClearScore is going to help everybody get this control and to ensure they get access to the best financial products tailored for them.

By combining a brand which people trust, a product which is beautiful to use, amazing technology and deep analytics, the company delivers a unique experience that helps people take control of their financial future.

TransUnion CIBIL

TransUnion CIBIL Limited is a credit information company operating in India. It maintains credit files on 600 million individuals and 32 million businesses. TransUnion is one of four credit bureaus operating in India and is part of TransUnion, an American multinational group

Trans Union CIBIL aggregates consumer borrowing and payment information for the purpose of assessing loan risk and pricing credit (setting the interest rate). It has partnered with Chicago-based TransUnion.

Consumer credit scores are also used in unemployment decisions, although there are no studies in India showing that impaired credit leads to employee misconduct and unemployment

TransUnion CIBIL aggregates business financial and payment information for the purpose of assessing loan risk and pricing credit (setting the interest rate. It has partnered with New Jersey based Dun and Bradstreet. D&B maintains files on 150 million business worldwide.

ChexSystems

ChexSystems is a consumer-reporting agency that gathers information about problems you’ve had with checking your credit accounts. ChexSystems reports include, but aren’t limited to, account misuse or fraudulent activity that has occurred within the previous five years.

Just like the major credit check organisations, ChexSystems collects information about a specific set of your activities. But instead of information about your credit history, ChexSystems collects information about your checking account history.

Here’s some of the information you may find in a ChexSystems report.

• Identifying information like your name, Social Security number and past addresses
• Unpaid negative balances, including overdrafts or accounts closed involuntarily
• Suspected fraudulent activity
• Account inquiries or applications for other bank accounts
• Unpaid fees
• Public records

Although some other consumer reports contain negative information from the previous seven years or more, ChexSystems reports generally keep negative information on record for only five years. But each financial institution has its own rules about how much time must pass after a negative incident before you can open a new bank account.

Lexington Law

Lexington Law has helped more consumers in their quest for fair and accurate credit reporting than any other credit repair company. More than 500,000 consumers have turned to Lexington Law for help with removing negative entries and ensuring the accuracy of their credit report.

The company works with a network of licensed attorneys with advanced training in consumer advocacy, consumer law, and the most current credit reporting practices.

Size matters when it comes to protecting consumers’ rights against inaccurate credit entries, unresponsive creditors, and the bureaucracy that is our credit reporting system. Lexington Law is by far the largest single credit repair firm in the U.S., and having this scale is what allows the legal experts at Lexington Law to provide reliable, affordable, and effective credit repair for thousands of consumers every year.

Some of the many benefits you can expect when choosing Lexington Law include:

• Licensed attorneys
• Free consultations
• Choose from different service levels

• Discounts available
• Free online educational resources
• Legal firm with a strong reputation

Lexington Law also offers credit-challenged consumers the ability to choose from basic to advanced credit repair services, based on each individual’s personal financial situation. This lets consumers select the level of credit repair that fits their needs, with transparent and affordable pricing of these services starting at $89.95 a month.

Compuscan

Compuscan is a South African credit check organisations that provides consumer and commercial credit information within South Africa and other African nations.

The company, which was originally focused on providing credit history reporting for microcredit transactions, is among South Africa’s leading credit bureaus and is a member of the nation’s Credit Bureau Association. The company also provides microcredit reporting services in the neighboring republics of Botswana and Namibia

In South Africa, Compuscan is a registered credit bureau in terms of the National Credit Act (NCA). As per the NCA, all credit bureaus in South Africa are to supply South African citizens with one free credit report per year.

The company also markets credit bureau services to businesses in the credit and financial industries; as well as training services, marketing services, analytics consultancy and loyalty and rewards offerings to a various other industries

CRIF High Mark Credit Information Services

CRIF High Mark Credit Information Services is a credit bureau based in Mumbai. Catering all borrower segments, CRIF High Mark is the pioneer in building the country’s first and world’s largest Micro-Finance Bureau Database.

Besides offering credit score, CRIF High Mark provides analytics, data management and related software solutions. The credit bureau promotes a mature credit culture in the Indian economic system, sustaining the financial needs of consumers and businesses.

CRIF High Mark is an independent entity licensed by the Reserve Bank of India (RBI) and registered under the Credit Information Companies Act, 2005, to provide its members with credit information products and related services. It has banks, NBFCs and other financial institutions as its members.

Member institutions are required to provide data regarding every customer’s credit-related activity. It collates this data on individual consumers and businesses and presents it in a highly readable format.

This information enables lenders make informed decisions regarding lending and enables them to function in a more transparent and efficient manner and at a lower cost than is otherwise possible.

Member institutions report to the credit bureau (and the other credit bureaus in operation) on a periodic, generally monthly, basis about individuals’ credit behavior.

The credit bureau, as mentioned before, then processes this information into a usable and readable form and provides credit information reports based on the information provided by the members. It also provides a credit score and a host of other services amongst other related products.

CRIF High Mark maintains records of all credit-related activity of individuals and companies including all transactions on loans and credit cards. This extensive data present with the credit bureau enables lenders to make informed decisions while evaluating prospective lenders for loans in India.

Borrowell Inc.

Borrowell Inc. provides financing for consumer loans. The Company offers equipment, consumer and commercial revolving credit, and student loans. Borrowell serves customers in Canada

Borrowell helps consumers make great choices about their credit.

With its free credit score monitoring, personal loans and product recommendations, Borrowell empowers Canadians to improve their financial well-being and be the hero of their credit.

Noddle

Noddle is a UK-based service offering credit reports for their customers. Unlike competitors such as Equifax and Experian, Noddle has always given customers the opportunity to view their full credit report for no charge, with the promise that they will never charge for their basic service.

Noddle is one of a number of services offering credit reports for consumers, and there’s a good chance you will have come across Noddle if you’ve ever considered finding out your own credit score.

Noddle is run by UK-based credit analysis company Callcredit, who launched the service in 2011. The service was initially launched on a trial basis, with Callcredit inviting 10,000 users to try the service before their full launch.

As well as their free credit report service – which allows customers to check their eligibility for credit cards and loans – Noddle also offers a range of paid services.

These include Noddle Improve, which gives users advice and tip on how to improve their credit score, and Noddle Web Watch, which monitors fraudulent use of their customers’ personal information, highlighting any issues.

Nav

Nav offers business owners transparent, start-to-finish services to help get them the best financing possible. The leading Business Financial Management platform, Nav has been used by 1 million business owners in the U.S to monitor and build their business and personal credit and explore more than 100 different financing products including a variety of loans and credit cards.

The Nav marketplace houses about one hundred financial products, including business loans and credit cards. Products can use either a company credit score or personal credit score in qualifying for credit. The company also uses artificial intelligence. Its platform is also used to manage SME financial data with a target of accessing working capital, and provides credit scores

Credit.com

Credit.com provides information about your credit, including free Experian credit scores, a credit report card, and articles about personal finance in general. If you need to learn about your credit and how to improve it, the site can be helpful.

Credit.com also earns money by selling additional products and services. For example, you can buy other credit scores (besides your Experian score) and other credit information.

Credit.com also partners with advertisers and affiliates that pay Credit.com for referrals. Those additional products and services include things like credit monitoring and identity theft protection services.

Tasmanian Collection

Tasmanian Collection Service is the recognised leader for debt collection in Tasmania. They specialise in debt recovery and have access, expertise and professional relationships across the state, maintaining a consistently high recovery rate for our clients.

Whether you are a large corporation, government entity, small to medium business, sole operator or a property owner, Tasmanian collectin will provide tailored, result focused and cost effective solutions to improve your cash flow and debt collection issues.

Their offices are strategically situated in Hobart, Launceston & Burnie to provide a statewide service. Their team of experienced debt collection specialists live in the area they work in, they know your customers, and they understand the difficulties they face, which is critical to finding a quick and satisfactory solution.

Tasmanian Collection Service works on a no recovery, no commission basis. If they are not successful in recovering your debt, you will not pay commission. There may be occasions where other charges may apply (for example, legal action) but these will always be discussed with you before they are incurred.