“I stumbled on this photograph, it kinda made me laugh. It took me way back, back down memory lane. I see the happiness, I see the pain. Where am I? Back down Memory Lane” – Minnie Rippleton

Everyone has heard of the three major credit reporting agencies: Experian, TransUnion, and Equifax better known as the infamous credit bureaus. They are responsible for stalking you, I mean, keeping track of consumer spending and repayment history. Prior to their existence, a consumer could default on their financial obligation and easily go to another financial institution and obtain financing.

Most people are under the false impression that credit bureaus are operated by the government. Well, I hate to break your heart, but that is not true. All three bureaus analyze consumer credit in the US and each one of these agencies has its own proprietary method for doing so.

Experian, originally known as TRW, was formed by two engineers in the early 1960s. In the mid-1980s, TRW held credit histories of approximately 90 million American consumers. After several problems with gathering credit data the consumer credit information division of TRW broke away and joined forces with the largest credit reporting agency in the UK and officially became Experian in 1996.

Like Experian, TransUnion began in a company whose core business had absolutely nothing to do with gathering credit data. The Marmon Group focus was in manufacturing, not consumer credit collection. In the late 1960s, they acquired a credit data collector. By the late 1980s, TransUnion maintained consumer data in all 50 states.

Now, the oldest credit reporting agency of the three is Equifax. Equifax actually began in a grocery store in the late 1800s. Yep, that’s right, a grocery store. Over the years, they were faced with numerous credit reporting errors. By the mid 1980s, Equifax maintained data for 150 million consumers.

Mass credit card usage became a huge part of the United States in the 1970’s. Losses to creditors was common. Consumer data collection was in complete disarray. But not so much anymore. Consumer data collection has improved over the years, however it’s still not 100% error proof.

At last, assistance for the consumer has arrived in the form of Fair Credit Reporting Act, 15 U.S.C. § 1681 (FCRA). This U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports.

The FCRA regulates the collection, distribution, and use of consumer information, including consumer credit information. It was passed to ensure fairness, accuracy and privacy of the personal information contained in the files of the credit reporting agencies.

Credit bureaus may have been established to aid creditors, but the FCRA has been established to protect consumers.

It is time for you, as a consumer to start protecting yourself. Here are two steps to get you started in the right direction.

  1. Research the history of each credit reporting agency.

This will help you fully understand how they operate. Knowledge is power!

  1. Treat the credit bureaus as an ally, not an adversary.

Although the credit bureaus were created to protect the creditors from losses, they can also be beneficial to you as well.

If you are interested in gaining a better understanding about credit, visit agolden_associates on Instagram for tips to becoming #FinanciallyGolden.