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Credit bureaus are also called Credit Reporting Agencies. They are firms which deal with collection of credit records and trends, payment habits, legal histories and other vital data for use by lenders, employers or any other relevant party that may be interested. These firms collect all the above information and compile a single file for each person and later sell the information to any lender or party that comes seeking for them.

The bureaus carry out thorough research about a person’s credit history and consumer habits and compile it into a simple and easy to understand report that is kept at their offices. This data is very vital especially to banks and other financial lenders as they use it to determine credit worthiness of the borrower. No institution wants to risk their money by lending a customer known for defaulting. Apart from that they use this vital information to determine the rate of interest to charge loan applicants.

Credit bureaus do not however deal with credit information compilation alone. They also have legal and criminal records of individuals. These include past convictions, charges, criminal activities as well as bankruptcy history. This information is very vital nowadays to employers. Recruiting companies are easily the biggest consumers of this information. Each potential employer wants to know what kind of an employee they are bringing into their companies. Some jobs are quite sensitive and will definitely prefer someone with a clean criminal record. Some of these jobs include financial handlers as well as sensitive merchandise dealers.

The credit bureau also documents records on physical identification details like official names, identification number, physical address, birth date, phone contacts, past and current employers as well as tax payment information.

When credit bureaus compile this information, they are supposed to give a copy to the owner. Some people are not however interested in keeping these copies and only go to the credit bureau when they want some recommendation for employment or loan facilities. It is illegal for the credit bureau to give or disclose this information without the consent of the owner. If a bank, employer or lender wants to access this information, they are supposed to get a written authorization from the owner of the file. Credit bureaus can sometimes make mistakes when compiling their information. It is therefore advisable to keep checking the status of your credit report to avoid wrong information concerning you being given out.