What is the primary role of credit reporting agencies?

The primary role of credit reporting agencies is to collect and maintain consumer credit information. These agencies gather data from various creditors about individuals' borrowing and repayment behavior, which is then compiled into credit reports. These reports provide a comprehensive overview of a consumer’s credit history, including information such as payment history, outstanding debts, and credit utilization. This data is critical as it helps lenders assess the creditworthiness of consumers when they apply for loans or other forms of credit.

Credit reporting agencies do not provide loans, grant or deny credit directly, or assist in bankruptcy filings; their function is solely to manage credit information. By accurately reporting consumer credit activity, these agencies serve as a vital link between consumers and lenders, ensuring that credit decisions are based on reliable and up-to-date information. This creates a fairer and more efficient lending process, allowing consumers to access credit while maintaining accountability for their financial behaviors.