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A credit bureau is an agency in the form a company or organization that collects specific information about credit behavior of credit card holders or borrowers in general and keeps the information in a data base to be used for credit related decision making purposes. The credit bureau provides this information to lenders to help them assess the credit worthiness of potential borrowers. They collect such information as loan borrowing and repayment history and bill payments. Lenders use this information to decide whether it is a worthwhile venture doing business with individuals and what interest rates to charge on any credit advanced to them. The idea is to charge those deemed to be potentially less risky lower interest rates to encourage them to do business with the lender and to repay in time while charging those deemed risky more both to discourage them from dealing with the lender and scoop as much as possible from them before they become problematic.

Retailer outlets issuing credit cards or supermarket chains may use the information from the credit bureau to decide what pricing policy to apply on various customers depending on their repayment history. This may determine the annual fee for credit card holding as well. The credit bureaus collect information from data furnishers who are actually the people on the ground with data capturing capacity and logistics. Furnishers include lenders, utility service providers, debt collection agencies, courts and creditors who cooperate with credit bureaus and furnish them with all information or experiences they have experienced with various individuals concerning payments of whatever kind.

Credit bureaus keep the credit related information received into their repository or file and avails it to their customers on request. The information collected is used to make credit scores which are used to determine whether to employ an individual or lease apartments besides the lending business. The credit bureau is supposed to organize these data into a system which is easier to comprehend and use such as a score sheet giving a grade.

Which credit bureau to deal with is one that certainly performs the above functions accurately and synthesizes the data into a format that is largely comprehensible and according to established criteria. And this is besides the basic requirement set by the regulatory authority which licenses them for their operations. A good credit bureau is that which keeps accurate information and cooperates with other players including potential borrowers to correct any anomalies detected in their data to ensure quality service to all.