Though they do not themselves decide whether an individual qualifies for credit or not, credit bureaus, otherwise known as consumer reporting agency or credit reporting agency, serve a vital function for banks credit card companies and other financing institutions, as well as debt counselling in SA. Private firms, credit bureaus research and collect all information that can be considered relevant to a consumerís credit history and habits.
Providing a service to creditors, landlords, and the consumer themselves, credit bureaus collect information on payments, credit behaviour, indebtedness and employment records and will release the credit history of an individual, for a fee, if that person has given permission for them to do so.
Invaluable to lenders who use the information to assess a prospective loan application, consumers are also welcome to request their own credit reports at any time for a small fee. This gives the consumer the power to know their credit status, and identify potentially fraudulent activity in their name. Debt counselling in SA will also make use of credit bureaus to verify a consumerís debt.
A clever consumer should request a credit report at least once a year, and many bureaus provide this service for free every twelve months. A credit report will also indicate if a consumer is currently under debt review, meaning that the consumer could not manage their debts any more, and has sought out the services of debt counselling in SA. It will state that the person may not apply for any credit until they have completed their debt counselling programme.
In South Africa the three major bureaus are Experian, Transuinion and XDS and these three are checked consistently by lenders, credit providers and consumers alike. Many bureaus also came together to create Associated Credit Bureaus Inc and this association is now viewed as the regulatory body among the credit bureaus, creating non-fraudulent and regulated data collection processes when it comes to credit reports. The credit industry would be lost without credit bureaus, as it is always a risk extending credit to an individual.