Credit bureau definition

A credit bureau is an organization that acquires, assembles and reports the credit history of individuals and businesses for its customers who then use that information to assess the risk associated with providing credit. Credit bureaus collect data from a wide variety of sources (e.g. businesses, utilities, debt collection agencies, public institutions and the courts) to calculate a credit rating (numerical score) based on how much credit is already in place, the payment history and other factors. The higher the score the less risk and vice versa.

For many years there were many regional credit bureaus, but more and more credit reporting comes from national firms.

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