Credit bureaus are partners with different lending institutions such as banks and help them in giving their decisions. These creditors analyze the report and score of the consumer and according to that accept the loan and credit application. The lenders have to ensure that the borrowers should have the ability to repay the loans on time. A borrower should always pay the loan on time otherwise some amount of interest will be charged on them. A lender may reject the request of the borrower based on the report, they will see whether the borrower is creditworthy or not.

Three major credit bureaus in the US

EquifaxTransUnionExperian

Some of the other bureaus also provide information as well. If a borrower is less creditworthy then the lender may deny the loan and if agreed then they will charge a higher rate of interest. On the other hand, if the borrower is considered creditworthy they will be charged lower interest rates. The credit bureau does not decide on whether the loans can be extended or not. Credit bureaus help the customers to know their reports.

Information that credit report contain

Identification: It includes information related to Name, Address, contact no., Email ID, Aadhar card, PAN no., and more.Credit Account: The credit account information includes, the date of opening of the account, credit limit, payment history, account balance. They will also check whether your payments have been made on time or not.Credit Inquiries: It is a request by the customer to look into their credit report. Such inquiries are referred to as hard inquiries and they can affect the credit score of a person. Soft inquiries referred to when a person itself downloaded the credit report. They do not have any effect on the credit score.Bankruptcies: Such records are not mentioned in the public record but can be analyzed by the credit bureau. A bankruptcy record may be shown in the credit report for up to 7 years.

Which information isn’t collected by the credit bureau?

Gender Income Political viewsRace 

This information can be collected by the credit bureau but does not show on the report.

Which type of brand is Gap and what credit bureau does Gap use?

A Gap is a company that is engaged in selling clothes, accessories, personal care products. Gap brand is available in every Mall and stores, they provide less costly clothes hence, everyone can buy them easily. The gap brand is very famous because it’s easy to buy as it is present everywhere.  Synchrony Bank is the lender of the Gap, and they get their credit report from TransUnion, which is a credit bureau. When a shop owner wants to apply for a card from Synchrony bank, the bank has to check the credit report from TransUnion. There is a possibility that other bureaus give different details and scores. It is important to know which bureau report is used by the lender.

Different credit score from different Credit bureaus

It is normal to get different scores from the different bureaus because each bureau has its scoring model and algorithm. This also happens because credit bureaus get their information from banks, and banks do not provide some data to every bureau. This can cause one bureau to have more unique data, and the other one does not have much information, or they are not up-to-date.

Best credit score

The credit score should be between 300-900 in the range. The different bureaus will assign different credit scores according to their algorithm. GAP brand has a good credit score because this brand can be purchased by everyone. After all, this is not a costly brand. Hence the owner can easily repay the loan and gets a good credit score and report.

Effects of poor credit score

A poor credit score can affect a person badly as an individual cannot get a loan from the bank if they are suffering from a financial crisis. If a person does not pay a loan or some other couple of payments, then it will reflect on the credit report. The bank that gave a person a credit card can reject or close the credit card because the person has not paid the finances. The loan application can also be rejected.

Conclusion

The Credit Bureau plays a major role in people’s lives. If the report mentions all the positive things about the customer, and the customer or the borrower has paid all the payments on time, then they are referred to as creditworthy, and the bank can provide the loan at a lower interest rate. Different bureaus can have different credit scores. GAP has a good credit score because they always pay on time, and the bank provides them lower interest rates because they are creditworthy. A person should not have a bad credit score because the bank will not provide the loan, and they will not get the job easily, as the employer of the company checks the credit report of the person.