Experian
Experian is a Credit Bureau with over 30 years of experience
and more than 30,000 clients (companies who use their
information to determine who to lend money to). A credit
bureau is an agency which compiles and distributes credit
information to companies, lenders and creditors. This
information typically includes payment history, number
of opened and closed credit accounts, the types of credit
accounts (revolving, mortgage, automotive), date the accounts
were opened, as well as a monthly update on the balance
of your accounts. These reports may also include elements
of your employment history.
Using a product they call Portfolio Solutions, Experian
sells information which lets lenders to know when you
have been inquiring about additional credit (the Fair
Credit Reporting Act of 1970, as amended in 1996 allows
them to do so). Using this information, lenders will often
send you advertisements and credit card applications in
the mail hoping to gain your business. Since Experian
has over 30,000 clients in North America, this translates
to a lot of "junk mail" for people across America.
Some individuals don't mind getting these credit card
offers in the mail and may even pursue some which offer
lower interest rates. Others find the idea of any aspect
of their credit record being sent to financial and lending
institutions without their knowledge somewhat disconcerting.
If you are among the second group, there is a simple solution
offered by Experian - you can write to them and ask your
name be removed from the list. The address to do so is:
Experian
Consumer "OPT-OUT"
901 West Bond
Lincoln, NE 68521
Experian performs a rather important function. They give
companies the confidence to loan you money. This enables
you to use a loan to purchase items such as a car or a
home, and is often used to determine credit worthiness
to rent an apartment. Understanding how Experian builds
their report will help you obtain a good credit score.
The Fair Isaac Corporation has established a method to
determine a credit score - known as a FICO score. Experian
takes that method and applies it to the information contained
in your file to create what is called the Experian/Fair
Isaac score. While it is the same Fair Isaac risk score,
the actual formula has been adapted to work with the different
computer systems at each of the national credit reporting
agencies, each credit bureau has a different name for
this score for marketing reasons.
The FICO score and the Experian/Fair Isaac score are general
credit risk scores, meaning they are used in many different
types of lending decisions. However there are credit risk
scores specifically designed for specific cases such as
auto buying and home lending. It is quite possible that
the auto-specific score would be different than a credit
score used for general lending purposes, or credit scores
designed only for mortgage lending.
Credit scoring systems all look at the same information
- the details in your credit report. However, the systems
look at the information in slightly different ways depending
on the type of loan the score is being used to asses.
Those differences are usually very subtle. Items which
indicate lending risk - late payments, charged-off accounts,
collection accounts, and maxed-out credit card limits
- are the same, no matter what credit scoring system is
used. It is the way those issues are measured by the credit
risk scoring system, tailored to a specific loan type,
that may provide different results. For example, credit
risk score developers know people would rather skip a
car payment than a house payment. As a result, a recent
late payment might make a bigger difference in an auto-specific
score than in a mortgage-specific score. If you were recently
denied credit due to information provided by Experian,
you can find out what most negatively impacted your Experian/Fair
Isaac credit score by reviewing the reasons listed on
the denial letter for not being approved - these are known
as risk factors. The risk factors describe what elements
from your credit history most impacted the scores. Some
common factors Experian warns may hurt a credit score
are having too many open revolving credit accounts, late
payments, have too high of a balance on your credit accounts
(maxed out cards), not having a long enough account history,
and having a high number of recent checks on your credit
report (indicating you are desperate to find a lender
willing to extend you credit).M
Once you understand what the factors are, Experian believes
you can change you credit behavior to raise you credit
score. It is a good idea to close inactive accounts if
you have several other active, open accounts. Always try
to keep your credit card balances low, as this will show
you are more responsible with money management. Contact
your lender directly if you are encountering financial
difficulty to see what alternative arrangements can be
made - Experian is unable to advocate on your behalf.
To contact Experian about general issues or more detailed
information, they have established The National Consumer
Assistance Center. This is the division of Experian which
has been established to handle all consumer issues, and
they may be reached at:
National Consumer Assistance Center
PO Box 2002
Allen, TX 75013
To order report: 1-888-397-3742
To report fraud: 1-888-397-3742
Web site:
www.experian.com
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