A consumer reporting agency is an organization providing information on individuals' borrowing and bill-paying habits.
For example, adequate credit information could facilitate lenders in screening and monitoring borrowers as well as avoiding giving loans to high risk individuals.
Data furnishers are typically creditors, lenders, utilities, debt collection agencies (credit bureaus) and the courts (i.e. public records) that a consumer has had a relationship or experience with.
To simplify the analytical process for their customers, the different consumer reporting agencies can apply a mathematical algorithm to provide a score the customer can use to more rapidly assess the likelihood that an individual will repay a particular debt given the frequency that other individuals in similar situations have defaulted.
Most consumer welfare advocates advise individuals to review their credit reports at least once a year to ensure they are accurate.
CIBIL is now promoted by TransUnion International Inc. (TransUnion) to provide comprehensive credit information by collecting, collating and disseminating credit information, pertaining to both commercial and consumer borrowers, to a closed user group of members.
CRIF High Mark is India’s first full-service credit bureau serving all borrower segments – Retail, Agri & Rural, MSME, commercial and Microfinance.
The Electronic Credit Information Bureau (CIB) was established by the State Bank of Pakistan (SBP) in December, 1992.
Aquitas Information Services (AISL) under the brand name TASDEEQ is the first licensed private Credit Bureau in Pakistan.
[citation needed] In the United Kingdom, the Credit Reference Agencies are Experian,[8] Equifax and TransUnion.
There's also a federal legislation called the Personal Information Protection and Electronic Documents Act (PIPEDA)[12] that must be abided by the credit reporting agencies.
[13]: 149 By the late 1890s, credit management was professionalizing, with retailers and bureau operators systematizing creditworthiness categories.
[13]: 252 More flexible card files and widespread telephone usage made credit rating books obsolete.
In the hearings on the 1970 Fair Credit Reporting Act lawmakers were troubled that individuals were helpless to clear up errors.
In the United States, key consumer reporting agency consumer protections and general rules or governing guidelines for both the consumer reporting agencies and data furnishers are the federal Fair Credit Reporting Act (FCRA), Fair and Accurate Credit Transactions Act (FACTA), Fair Credit Billing Act (FCBA), and Regulation B.
Two government bodies share responsibility for the oversight of consumer reporting agencies and those that furnish data to them.
The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks with regard to the data they furnish consumer reporting agencies.
Most U.S. consumer credit information is collected and kept by the four national traditional consumer reporting agencies: Experian (formerly TRW Information Systems & Services and the CCN Group), Equifax, TransUnion, and Innovis (which was purchased from First Data Corporation in 1999 by CBC Companies).
Incorporated in March 2002, PRBC enables consumers to self-enroll and build a positive credit file by reporting their on-time payments (such as rent, utilities, cable, and phone) that are not automatically reported to the three traditional credit bureaus.
Meetings were held for this purpose and officials were assigned to coordinate with the World Bank to consider existing international experiences for some countries to establish a credit bureau based on methodological and knowledge approaches to contribute to the Saudi national economy.
SIMAH was then established to operate within the context of the current banking act and regulations issued by SAMA.
[15] According to Avery, Calem, and Canner in Credit Report Accuracy and Access to Credit, "the parties that bear the costs of correcting errors or providing more timely and complete information [data furnishers and consumer reporting agencies] may not receive much benefit from the improvement in accuracy.
At least two things need to be examined: First is that the operation of a more general "chilling effect" that imposing a non disclosed law may have and; Secondly the social effects of discrimination, which take an entirely new light in the context of no longer discriminating against race creed color age or religion, but on the basis of a number, a number which has been assigned to all members of society reflecting information about that person which is unknown.
[18] The VIP database is specially administered by the bureau, which ensures the credit report of the consumer is accurate and not negatively handled.
[19] So far an economic model to describe this industry has not been attempted, while the fundamentals are counter intuitive to any market known, since other industries (finance, banking, insurance) sponsor consumer reporting agencies to process information while consumers pay CRAs to receive that information.
Commercial credit reporting and scoring bureaus also exist and can be used to evaluate the likelihood of a business paying creditors.
TransUnion, Equifax, and Rapid Ratings International are also examples of commercial credit reporting agencies.