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Credit bureau

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Title: Credit bureau  
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Subject: Credit score in the United States, Comparison of Australian credit score websites, Bankruptcy risk score, Compuscan, Credit reference
Collection: Banking, Credit Scoring, Information Systems
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Credit bureau

A credit bureau — also known as consumer reporting agency in the

  • World Bank GFDR Report
  • Federal Trade Commission Governmental Page on Free Credit Reports
  • Federal Trade Commission Governmental Page on FCRA and consumer rights
  • OCC - Office of the Comptroller of the Currency
  • State Bank of Pakistan FAQs about Credit Bureau
  • List of UK Credit Reporting Agencies
  • Consumer Financial Protection Bureau (CFPB) List of Consumer Reporting Agencies (CRAs) as of January 2015

External links

  1. ^ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 512.  
  2. ^ Edited by Margaret Miller. (2003). Credit Reporting Systems and the International Economy. Cambridge, Massachusetts: MIT Press
  3. ^ a b Avery, Robert B.; Calem, Paul S.; Canner, Glenn B. (2004). Credit Report Accuracy and Access to Credit (PDF). Federal Reserve Bulletin, Summer 2004. Washington, D.C. 20551: U.S. Federal Reserve. p. 26. 
  4. ^ 6 Edited by Margaret Miller. (2003). Credit Reporting Systems and the International Economy. Cambridge, Massachusetts: MIT Press
  5. ^ Experian Statutory Credit Report
  6. ^ Equifax Statutory Credit Report
  7. ^ Callcredit Statutory Credit Report
  8. ^ David Baldock (Creator), James Scurlock (Directory) (March 10, 2006). Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders (Television Documentary). Mainstage Productions. Event occurs at 43:38. 
  9. ^ a b Hillman, Richard J. (July 31, 2003), "Statement for the Record Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate", Limited Information Exists On Extent of Credit Report Errors and Their Implications for Consumers (PDF), U.S. General Accounting Office, p. 22, GAO-03-1036T 
  10. ^ AGO Blog Moderator (December 18, 2007). "New credit score formula on horizon". Washington State Office of the Attorney General. Retrieved January 11, 2012. 
  11. ^ Weston, Liz. "Credit bureau move creates 'secret' scores". MSN. Retrieved January 11, 2012. 
  12. ^ David Baldock (Creator), James Scurlock (Directory) (March 10, 2006). Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders (Television Documentary). Mainstage Productions. Event occurs at 1:22:01. 
  13. ^ David Baldock (Creator), James Scurlock (Directory) (March 10, 2006). Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders (Television Documentary). Mainstage Productions. Event occurs at 1:22:30. 
  14. ^ Garrett, Joseph C. (20 January 2012). "Why Is It Important To Know My Credit Score?". Know My Credit Score. Retrieved 21 February 2012. 


See also

Country Major bureaus
 Argentina Nosis Credit Bureau, Veraz Equifax, Riskma Solutions
 Armenia Armenian Credit Reporting Agency (ACRA)
 Australia CreditorWatch, Veda Advantage, Dun & Bradstreet, Experian
 Botswana Compuscan
 Brazil Boa Vista Serviços, Serasa Experian
 Canada Equifax, TransUnion
 Cape Verde Creditinfo
 Chile Dicom Equifax, TransUnion, Siisa, Sinacofi
 Colombia Cifin
 Costa Rica TransUnion
 Dominican Republic Data-Crédito, TransUnion
 Ecuador Equifax, Acredita
 El Salvador TransUnion
 Germany Creditreform, Bürgel, SCHUFA
 Guatemala TransUnion
 Guyana Creditinfo
 Honduras TransUnion
 Hong Kong TransUnion
 Iceland Creditinfo
 India High Mark Credit Information Services, CIBIL, Experian & Equifax
 Islamic Republic of Iran Iran Credit Scoring
 Jamaica Credit Information Services Ltd

[Creditinfo] ]

 Kazakhstan Creditinfo
 Lithuania Creditinfo
 Malta Creditinfo
 Mexico Equifax, TransUnion
 Morocco Experian
 Namibia Compuscan
 Nicaragua TransUnion
 New Zealand Veda Advantage, Dun & Bradstreet, Centrix
 Pakistan eCIB
 Peru Equifax, Xchange Peru [3]
 Philippines CIBI Information, Inc.
 Poland Polish Credit Bureau "BIK"
 Romania Creditinfo
 Rwanda Compuscan
 South Africa Compuscan, Experian, TransUnion
 South Korea National Information & Credit Evaluation
 Tanzania Creditinfo
 Uganda Compuscan
 Ukraine Creditinfo
 United Arab Emirates Al Etihad Credit Bureau
 United Kingdom Experian, Equifax, Callcredit
 United States Experian, FICO, Equifax, TransUnion, Innovis, PRBC
 Saudi Arabia SIMAH Saudi Credit Bureau
 Singapore [4] DP Information Group], Experian

List of credit reporting agencies

Commercial credit reporting and scoring bureaus also exist, and can be used to evaluate the likelihood of a business paying creditors. Examples of commercial credit reports are the Paydex score from Dun & Bradstreet, the Experian Intelliscore, the CPR Score from Cortera, the GCS score from Global Credit Services, and the CIC Score and NACM National Trade Credit Report from the National Association of Credit Management. TransUnion, Equifax, and Rapid Ratings International are also examples of commercial credit bureaus.[14]

Business Credit Bureaus

According to David Szwak, a partner in Bodenheimer, Jones & Szwak which specializes in insurance law and litigation against credit bureaus, some credit bureaus in the United States maintain a VIP database of special consumers such as members of Congress, judges, actors and celebrities.[12] The VIP database is specially administered by the bureau, which ensures the credit report of the consumer is accurate and not negatively handled. The database exists because individuals in the VIP database could cause significant problems for the bureaus, including negative publicity and legislative action which could adversely affect the industry.[13] 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 credit bureaus to process information while consumers pay bureaus to receive that information. The utility of the consumer is hard to calculate since the consumer is given no recourse to correct mistakes processed about them, hence the dynamics of this triangle involving consumers, credit reporters, and sponsoring industries remain undefined.

Some credit bureaus in the United States provide two credit scores - an 'educational' score to the consumer and a customary FICO-like score to the lender or business. Liz Weston writes that some consumer advocates refer to these other [educational] credit scores as "FAKO scores" (a play on acronym of FICO).[11] In consideration of the fact that algorithms which rate people are used in a discriminatory fashion to deny people legal rights (employment, insurance, credit, etc.), those very algorithms act as law. The law says that if one does "this" or if one "does" that, then they will be afforded different treatment and opportunities. What needs to be done though remains a secret. Therefore people are called on to abide by a secret law. 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. Accordingly there can be no definition at present of what information credit repositories collect or even what the use of that information is or what it reflects. These questions can only be answered if the algorithms were publicized and expert statisticians were permitted to examine them and improve on the intent of the model, which intent is also undisclosed.

The formula to calculate consumer credit scores by a credit reporting agency is proprietary and considered a trade secret of the agency in the United States.[10]

In the United States, 90% of credit reports provided by credit bureaus contain inaccuracies.[8] According to the U.S. General Accounting Office (GAO), common causes of errors broadly fall into one of two categories: inclusion of incorrect information and exclusion of correct information.[9] Reasons for the inaccuracies include consumers providing inaccurate information to the credit bureaus; incorrect or incomplete data input by furnishers, or failing to provide data to the credit bureau; and incorrect or incomplete data (or data applied to the wrong consumer) by the credit bureau.[9] 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 credit bureaus] may not receive much benefit from the improvement in accuracy."[3]


S SIMAH IMAH was then established to operate within the context of the current banking act and regulations issued by SAMA.

The idea goes back into 1998 when national commercial banks and SAMA thought of establishing a Saudi credit bureau offering consumer and commercial information. 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.

The Saudi Credit Bureau (SI SIMAH MAH) is the first and sole licensed national credit bureau offering consumer and commercial credit information services to respective members in the Kingdom of Saudi Arabia. It was established in 2002 and began operating on the ground in 2004 under the supervisory umbrella of Saudi Arabian Monetary Agency (SAMA).

Saudi Arabia

In 1997, Credit Information Bureau, Inc. was incorporated and transformed into a private entity and became CIBI Information, Inc.

In 1982, Credit Information Bureau, Inc. was established through the power of Presidential decree 1941 and created under Central Bank of the Philippines, now Bangko Sentral ng Pilipinas (BSP) department of Loans and Credit, the Securities and Exchange Commission (SEC) and the Financial Executives Institute of the Philippines (FINEX); to initiate a credit information exchange system in the country.

On April 14, 1982, Credit Information Bureau, Inc. was incorporated as a non-stock, non-profit corporation. (See: Presidential Decree No. 1941 [7])

In adherence to the order, Central Bank of the Philippines organized the Credit Information Exchange System under the department of Loans and Credit. It was created to engage in collating, developing and analyzing credit information on individuals, institutions, business entities and other business concerns. It aims to develop and undertake the continuing exchange of credit data within its members and subscribers and to provide an impartial source of credit information for debtors, creditors and the public. This will also cooperate and guide government agencies in their credit information requirements.

In 1981, Ferdinand Marcos, then President of the Republic of the Philippines, issued a Letter of Instructions No. 1107 mandating the Central Bank of the Philippines to analyze the probability of establishing and funding the operation of a credit bureau in the Philippines due to the disturbing increase of failures on corporate borrowers.


The ICS tend to aggregates credit related information among participating members to provide the credit providers with a more complete risk profile of the customer. Participating members disclose credit related information to and obtain information from the Bureau to assess the credit worthiness of their existing and prospective customers, which enhances the credit providers risk assessment capabilities to determine whether or not the customer is likely to repay.

The main Objective of ICS is to help credit providers make improved lending decisions quickly and more objectively. To achieve this, ICS intends to aggregate credit related information among participating members to provide credit providers with a more complete risk profile of the customer (natural persons, unincorporated entities, corporate entities or any other entity).

Iran Credit Scoring (ICS) Company is the sole licensed national credit bureau offering credit information services to respective members in Iran. ICS is a private equity company established in 2006, by all Iranian banks (private and public banks) and other financial institutions such as leasing and insurance companies, operating in the Islamic Republic of Iran within the context of the current banking act and regulations issued by Iran Ministry of economic Affairs and Finance and Central Bank of Iran.

Islamic Republic of Iran

In the case of Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985) the U.S. Supreme Court held that a credit reporting agency may be liable if it was careless in reporting an impending or past bankruptcy filing of a business that is not a public figure.

Tort liability for business defamation

In the U.S., there are six business or commercial bureau repositories (in alphabetical order): Cortera, Dun & Bradstreet, Experian Business, Equifax Small Business Financial Exchange (SBFE), PayNet, and Southeastern Association of Credit Management (SACM).

PRBC (Payment Reporting Builds Credit, Inc.) is a national alternative credit bureau. 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.

There are dozens of other similar information collection and reporting firms that analyze and sell information about consumers for other purposes, including those who aggregate multiple credit data sources and provide lenders with customized analytical tools. Furthermore, there are also non-traditional credit reporting agencies.

Most U.S. consumer credit information is collected and kept by the four national traditional credit reporting agencies: Equifax, Experian and TransUnion. Consumers can go to, the Internet site maintained by the three companies, to get their free report.

Two government bodies share responsibility for the oversight of credit bureaus and those that furnish data to them. The Federal Trade Commission (FTC) has oversight for the consumer credit bureaus. The Office of the Controller of the Currency (OCC) charters, regulates, and supervises all national banks with regard to the data they furnish credit bureaus.

In the United States, key credit bureau consumer protections and general rules or governing guidelines for both the credit bureaus 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.

In the United States, the legal term for a credit bureau under the federal Fair Credit Reporting Act (FCRA) is consumer reporting agency — often abbreviated in the industry as CRA.

United States

The activities of Credit Reference Agencies are governed by the Consumer Credit Act 1974.

Consumer Credit Act (1974)

Credit reference agencies are bound by the Data Protection Act 1998, which requires that data relating to identifiable individuals must be accurate, relevant, held for a proper purpose and not out-of-date. Individuals have a legal right to access data held on them. The Act specifically gives consumers the right to request to a copy of their credit file by post for a fee of £2[5][6][7] The UK credit reference agencies will also allow consumers to access their credit report on-line free for a trial period, after which a monthly or quarterly fee may be charged for continued access.

Most banks and other credit-granting organisations subscribe to one or more of these organisations to ensure the quality of their lending. This includes companies who sell goods or services on credit such as credit card issuers, utility companies and store card issuers. Subscribing organisations are expected to provide relevant data to maintain the common data pool.

In the United Kingdom, the three credit reference agencies are Experian, Equifax and Callcredit, which works closely with its US partner, TransUnion.

Credit Reference Agencies

United Kingdom

The Electronic Credit Information Bureau (CIB) was established by State Bank of Pakistan (SBP) in December, 1992. The scope and activities of CIB are governed under the provisions of Banking Companies Ordinance (BCO), 1962. The Section 25(A) vests powers with SBP to call for credit information in such manner as it may deem necessary and make such information available to any banking company.


All member financial institutions are required to submit entire borrowers' records online to CIB on monthly basis. This information is submitted within a period of fortnight from the date of close of month.

The membership with CIB, as per instructions of SBP, is mandatory for all Banks, Developmental Financial Institutions (DFIs) and Micro Finance Banks (MFBs) respectively. No financial institution can access the CIB database without obtaining membership of CIB of State Bank of Pakistan.

eCIB ECIB is a software for monitoring credit reports all across Pakistan. State Bank of Pakistan monitors the Software and all the Financial Institutions in Pakistan are required to have this software installed. A monthly process updates the reports at the State Bank end.


Around the same time, RBI also granted operating license to High Mark Credit Information Services - the only start-up in this oligopoly. High Mark launched India's first micro finance bureau in early 2011 & today operates the world's largest micro finance bureau besides offering traditional bureau services for the Retail lending industry.

With two other major credit bureau coming to India in 2010 (Equifax and Experian) the Credit Environment is changing really fast and the importance of credit rating is being felt across length and breadth of the country

CIBIL was promoted by State Bank of India (SBI), Housing Development Finance Corporation (HDFC), Dun & Bradstreet Information Services India Private Limited (D&B) and 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.

The establishment of Credit Information Bureau (India) Limited (CIBIL), India's first Credit Information Bureau, is an effort made by the Government of India and the Reserve Bank of India to improve the functionality and stability of the Indian financial system by containing non-performing assets (NPAs) while improving credit grantors' portfolio quality.



  • India 1
  • Pakistan 2
    • History 2.1
  • United Kingdom 3
    • Credit Reference Agencies 3.1
    • Consumer Credit Act (1974) 3.2
  • United States 4
    • Tort liability for business defamation 4.1
  • Islamic Republic of Iran 5
  • Philippines 6
  • Saudi Arabia 7
  • Controversy 8
  • Business Credit Bureaus 9
  • List of credit reporting agencies 10
  • See also 11
  • References 12
  • External links 13

In addition to providing credit information, these services have become authoritative sources of identity information against which people can be verified using an identity verification service and knowledge-based authentication.

In the U.S., credit bureaus collect and aggregate personal information, financial data, and alternative data on individuals from a variety of sources called data furnishers with which the bureaus have a relationship. Data furnishers are typically creditors, lenders, utilities, debt collection agencies and the courts (i.e. public records) that a consumer has had a relationship or experience with. Data furnishers report their payment experience with the consumer to the credit bureaus. The data provided by the furnishers as well as collected by the bureaus are then aggregated into the credit bureau's data repository or files. The resulting information is made available on request to customers of the credit bureau for the purposes of credit risk assessment, credit scoring or for other purposes such as employment consideration or leasing an apartment. Given the large number of consumer borrowers, these credit scores tend to be mechanistic. To simplify the analytical process for their customers, the different credit bureaus 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.

and provides incentives for borrowers to repay their loans on time. [4] At the same time, consumers also benefit from a good credit information system because it reduces the effect of credit monopoly from banks[3]. Consumers with poor credit repayment histories or court adjudicated debt obligations like tax liens or bankruptcies will pay a higher annual interest rate than consumers who don't have these factors. Additionally, decision-makers in areas unrelated to consumer credit, including employment screening and underwriting of property and casualty insurance, increasingly depend on credit records, as studies have shown that such records have predictive rating, a form of price discrimination based on the different expected risks of different borrowers, as set out in their risk-based pricing and other terms of a loan. Interest rates are not the same for everyone, but instead can be based on interest rate, and can affect the loan This helps lenders assess credit worthiness, the ability to pay back a [2] and moral hazard. For example, adequate credit information could facilitate lenders in screening and monitoring borrowers as well as avoiding giving loans to high risk individuals.adverse selection between borrowers and lenders, and alleviate problems of asymmetric information Credit information such as a person’s previous loan performance is a powerful tool to predict his future behavior. Such credit information institutions reduce the effect of [1]

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