Credit bureaus are the companies that collect and maintain consumer credit information from the lenders we use for credit cards, mortgages, and other types of loans. They help measure our perceived creditworthiness, or the likelihood we will pay our credit obligations on time. Then, this information is compiled and provided to businesses that are interested in our credit history. Learn more about credit bureaus and why they are so important in our financial lives.
15 Business Credit Reporting Agencies You Should Know About
The 3 Major Credit Bureaus and What They Do
A credit rating agency CRA , also called a ratings service is a company that assigns credit ratings , which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments,  and in some cases, of the servicers of the underlying debt,  but not of individual consumers. The debt instruments rated by CRAs include government bonds , corporate bonds , CDs , municipal bonds , preferred stock , and collateralized securities, such as mortgage-backed securities and collateralized debt obligations. The issuers of the obligations or securities may be companies, special purpose entities , state or local governments, non-profit organizations , or sovereign nations. It affects the interest rate that a security pays out, with higher ratings leading to lower interest rates. Individual consumers are rated for creditworthiness not by credit rating agencies but by credit bureaus also called consumer reporting agencies or credit reference agencies , which issue credit scores.
Credit rating agency
Several credit rating agencies around the world have downgraded their credit ratings [ neutrality is disputed ] of the U. The downgrade was criticized by the U. Treasury Department ,  both Democratic   and Republican Party   political figures, and many business people and economists. Moody's, however, changed its outlook to negative on June 2, , and Fitch changed its outlook to negative on November 28,
Just like the three-major business credit reporting agencies, specialty reporting companies collect and share business credit file information with creditors and other businesses. Each of these agencies receive millions of updates on the account activities of businesses like yours. Now remember, there are many credit reporting agencies on both the consumer and business side.