credit bureau
An agency that collects and maintains credit information on individuals. The three major US bureaus are Equifax, Experian, and TransUnion.
Example
“She checked all three credit bureaus — Equifax, Experian, and TransUnion — and found an error on one report.”
Memory Tip
A credit BUREAU is an OFFICE that keeps your credit files.
Why It Matters
Credit bureaus determine your credit score, which affects your ability to borrow money, the interest rates you receive on loans and credit cards, and even your eligibility for rental housing or employment. Understanding how these agencies work helps you manage your financial reputation and catch errors that could harm your creditworthiness.
Common Misconception
Many people believe that checking your own credit report will lower your credit score, but this is false. Checking your own credit is considered a soft inquiry and does not affect your score, whereas hard inquiries from lenders do have a small temporary impact.
In Practice
When you apply for a mortgage, the lender requests your credit report from one or more bureaus and sees that you have missed two payments in the past year and carry a 8000 dollar credit card balance with a 10000 dollar limit. This information causes your credit score to drop from 750 to 680, resulting in a higher interest rate of 5.5 percent instead of 4.2 percent on your 300000 dollar home loan, costing you thousands of dollars extra over 30 years.
Etymology
From French 'bureau' (office) — an OFFICE that collects and reports credit information.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
See Also
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