If you have any loans or credit cards, your debt-handling habits are tracked, collected and put into reports by credit bureaus. Those reports are then used for credit scores, which help lenders determine whether to approve you for loans, and give you favorable interest rates. There are three main credit bureaus that operate as independent, for-profit companies and have your credit reports. TransUnion, based in Chicago, Illinois, is the third largest credit bureau in the United States. Like its major competitors Equifax and Experian, TransUnion markets credit reports and credit related products directly to American consumers and lenders.
If you want to keep tabs on what’s being reported about you, there are various ways to track your credit for free. One free credit report is available from each of the bureaus each year by going to AnnualCreditReport.com, and requesting your report from Equifax, Experian and TransUnion. If you don’t want to enter your information online, you can also call 1-877-322-8228.
They can be viewed online, or a copy can be mailed to you. You can stagger your requests so that you have access to a free credit report every four months to keep tabs on your credit profile. If you check your own credit reports, it won’t lower your scores.
Since your credit score with TransUnion and other credit bureaus can affect your loan approvals and interest rates for car loans, mortgages and even student loans, it’s important to check it for errors, false accounts and signs of identity theft. Credit.com provides a free snapshot of your credit report.
How Does TransUnion Determine My Credit Score?
The credit bureaus each have their own formula for arriving at a credit score for you, and you have a unique score from each one. Your TransUnion credit score ranges from 300 to 850, with the highest number being your goal for the best credit available. Good credit scores are generally 700 and above.
Your TransUnion credit scores are calculated by a number of factors: your payment history makes up 35% of your score, the amount you owe lenders comprises another 30%, the length of your credit history and when you started borrowing money accounts for 15% and new credit reports account for 10% of your score. So you should keep your credit card debts low (ideally 10% of the credit you have available on the card), and pay your debts on time. Don’t close your old credit card account because, if you’ve been responsible, they will reflect positively on your score.
TransUnion makes payment history the most important aspect of your credit score because it shows how you’ve managed your finances, including any late payments, according to the company website. Your credit history is considered because it demonstrates how long you’ve been managing your accounts, when your last payments were made and any recent charges, according to the website.
Little Known Fact: TransUnion is widely credited with designing the first automated tape-to-disc transfer system, a system that eventually replaced manual data-entry. The firm also built the first online information storage and retrieval data-processing system – the Credit Reporting Online Network Utility System (CRONUS®) – for creditors across the U.S.