Credit bureaus

Credit Bureaus are businesses.

There is a common misconception that the credit bureaus are government entities, or at the very least, not-for-profit agencies, created and regulated to act and conduct business in the best interest of the consumers they represent.

In fact, they are very much for profit. In fact, in the case of Experian, they make their money selling the information they collect on 215 million consumers around the world. As of 2006, Experian had revenue of $3.1 billion, and a net income of $520 million. That money comes from several different products and services, but the raw material is the consumers’ information.

For example, one of their products is a credit monitoring service that includes an annual credit report. In 2004 the federal government mandated that the consumer credit reporting agencies must, once a year, give Americans a free copy of their own credit reports.

Experian now offers consumers their credit reports as part of their Triple Advantage package for $79 a year. Experian advertises this service on their widely-advertised website www.freecreditreport.com, which is frequently confused with www.annualcreditreport.com, the website where you can really get a “free” credit report “free.”

And, that’s gotten them into trouble with the Federal Trade Commission and the Florida Attorney General’s office; apparently they frown on advertising something as free if it actually costs $79.

So how else does Experian make money from all that personal information? They sell it to other companies. Experian records your name (including nicknames and previous surnames), every credit purchase, your bills and payments, your jobs and salaries, your spouse’s name and SSN, your marriages and divorces, current and previous addresses, phone numbers (including cell phone, fax, business, pager and even pay phone) ,drivers license, year of birth, civil actions (including liens and bankruptcies), and then sells all these demographic details to other companies.

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