What are Credit Bureaus and Inquiries?

Credit building can feel overwhelming, many times due to the financial lingo and nuances that come with it. Credit bureaus and inquiries are some of the first facets of the credit-building process that you’ll come across on your credit-building journey, so they’re worth getting to know. To help you get started, we’ve rounded up an overview below.

Credit Bureaus

These companies collect data about your credit history. When you apply for a credit card or loan with a lender, credit bureaus report this data to them.

The 3 main credit bureaus are:

  1. Experian

  2. Equifax

  3. TransUnion

Each of these bureaus has their own model to develop your credit score, but they all take similar factors into consideration. This may include credit account activity, credit limit on the account, debt collections, and bankruptcies, according to Equifax.

Credit Inquiries

When you apply for a loan (such as a credit card or mortgage), the lender will typically want to review your credit history from a credit bureau. These credit reports help lenders make a decision on whether or not to accept your application based on your borrowing history. There are 2 kinds of inquiries, according to Experian:

  1. Soft Inquiry - These inquiries are not included in your credit report, but they can help get you get pre-approved for loans and credit cards.

  2. Hard Inquiry - These inquiries are reported on your credit report and can therefore affect your credit score. According to Investopedia, they can last up to 2 years on your report. Rental applications and employee background checks may also complete hard inquiries on your reports, Bankrate adds.

A low-stakes way to build credit

No hard pull on your credit is required to unlock a spending limit on the Perpay Marketplace. After shopping, making easy payments from your paycheck, and building positive repayment history as a result, Perpay+ allows you to report these on-time payments to the 3 major credit bureaus - all without a hard pull on your credit.

To experience these benefits and see all that Perpay has to offer, get started today.

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