There are times in your journey of life where you make major purchases: Homes, Auto, Business, and Engagement Rings are only a few examples. These are times where you invest heavily in your family, your comfort, your well-being, and your future. Some major purchases require more money than you have, or more money than you are willing to commit at one time. In these instances, you may seek a loan to help cover the expense. As you submit a loan application, the lender will want to know the risk they are taking in doing business with you: how likely are you to pay the loan back in full?

There are other instances when companies want to measure their risk in doing business with you: A potential employer may want to know if you’re financially responsible; an apartment may want to know how likely you are to break a lease. A utility company may want to know if you pay your monthly bills. Companies need to know the type of consumer you are, and that is measured by 3 main Credit Bureaus: Equifax, Transunion, and Experian. Credit Bureaus keep files on millions of consumers. Lenders and other companies inform them of your payment history and other information.