Understanding Credit Card Deals and Credit Bureaus' Work

What is a credit bureau? A credit bureau is a credit reporting agency that receives different financial information about people and organize it into a ‘credit score' that is a collaboration of a person's credit history. This is important because a consumer's credit score dictates what loans they can get, what car they can drive and what home they can finance.

 A poor credit history will make life much more difficult for many people and those with excellent credit will have a much easier time getting lower interest credit cards and fee free deals.

The three main credit bureaus in the United States are Experian, Trans-Union and Equifax and they handle the majority of financial issues for consumers.

 This is how they operate.

A credit bureau will access your payments information and credit information from the financial institutions you deal with on a constant basis. They will look at your credit card applications, your consistency paying rent and even your phone bills as they collect data for your credit history. Once this report is finished, it will tell all there is to tell about you in a financial aspect - where you live, how much you make, your best credit cards, your rent payments, your spouse's income, etc. There is nothing that will be left out!

Your information is used by the credit bureaus to establish a credit rating when a lender asks them. If you are applying for a new loan, the lender may approach one (or all three) credit bureaus to see if you are a qualified borrower. Your credit score will determine whether you are worth lending to or not. The score will range anywhere from 350 to 850 with the higher being better.

To get good credit you will have to have at least a score of 620. Anything less and you will have difficulty getting lenders to work with you, any higher and you will be considered having excellent credit (at which point your mailbox will start overfilling with credit card applications!). If you think you deserve a low APR or not as many fees you should check your own credit score to see where you currently stand in terms of lenders.

Your credit score typically speaks of your past two years of financial history. Only very serious issues will show up that occurred more than two years ago such as bankruptcy or other liability issues will appear on your report. The list below states some of the bigger things calculated on your credit report:

What your current level of debt is

How you choose to pay off your debt and how long you typically keep your credit accounts open for

What types of credit have you used in the past and why

How often are you applying for credit cards or other forms of credit

Do you often see your credit limit as a goal and constantly max out your credit cards

Keeping Tabs on Yourself

If you are serious about taking all the precautions available for protecting your credit score and keeping it in good standing then you should think about checking your own credit report a few times per year. You can go to any of the three credit bureaus to see it and checking it will ensure its accuracy. Each time you check your report you should have a paper and pencil and take note of any inaccuracies.

Credit reports are not perfect and they often are full of mistakes and each mistake could potentially hurt your credit score. In particular look for mistakes in address, phone number, Social Security Number and open credit card accounts. Many times you may fill out a credit card application and toss your old card in the garbage, but forget to cancel it! You want to make sure all of your old accounts have been closed!

By keeping a close eye on your credit report you are also doing what you can to stay away from identity theft. If there are any suspicious happenings on your credit report then you may be able to catch them before the situation gets worse. If you want to seriously take charge of your credit and your finances, make sure you obtain your credit report at least once per year.

Improving your credit isn't rocket science - it requires simple patience and time!

If you are ready to start improving your credit score so you can take advantage of all the instant approval credit cards and rewards programs for those with excellent credit then it is going to take time and patience. Below are some steps that your credit bureau is in charge of when it comes to improving your credit score:

If you think there is an inaccuracy on your credit report, report it immediately! The longer you wait to solve an issue on your report, the worse it can potentially get so report every suspicious happening immediately. Write to the credit bureau and include copies of documentation and a brief description of what is suspicious. Credit bureaus are required by law to investigate your claims within 30 days so it shouldn't be long before you have an answer.

If there is a mistake, the credit bureau must fix it! If your report has an inaccuracy then the credit bureau in charge must make the appropriate changes. Make sure you stay up on what is happening behind the scenes with your credit because your credit score is one of the most important numbers in your life! And if they make some serious mistake, you won't be able to get a top credit card deal.

When the investigation is over make sure you have the results on paper! After the credit bureau is done investigating your claim they should give you a copy in writing of what they did. If they took off the wrong charges then you should have a copy in writing of what they did for legal purposes. Make sure you have this! The paper must include the contact information of the provider.

If you find an inaccuracy you should tell the creditor as well as your credit bureau! Just like when you contact the credit bureau, you need to contact the creditor whose name is attached with the inaccuracy in the report and let them know what is going on. Include copies of documentation and a brief explanation of what is going on.

Credit bureaus must let you know when someone views your history - if you request so! You can actually insist that your credit bureau let you know each time a lender sees your credit history just to makes sure there isn't any wrong doings. Not every lender wants to see your credit score before lending to you but many will insist to.

Now, instead of them going directly to the credit bureau to see it, they will have to check with you first. This will better ensure your chances of keeping your credit history accurate!