In today’s real estate market, it is more difficult than ever to qualify for a mortgage. With delinquencies on the rise, your credit score needs to be good, if not stellar, for lenders to approve your loan.

Still, very few people understand credit basics. Even people who have owned multiple homes do not understand exactly how credit works.

This leads us to the simplest question of all. What is a credit bureau?

A credit bureau is a huge repository that stores date on most Americans. This information includes names, social security numbers, addresses, employment and, of course, credit history.

Some people think that when something on their credit report is inaccurate, the credit bureau is to blame. Many times, a lender will hear the statement that Experian is not reporting my car correctly.

This is not accurate! It is the lender that has reported incorrectly.

The credit agencies collect data, but they do not confirm that anything they report is accurate. They simply report the information given to them by the creditor. Unfortunately, this means that that the lender can report anything regardless of whether or not it is true.

It is estimated that between 40 and 70% of credit reports contain errors. These errors can lead to increased interest rates, credit refusal and even job rejection.

Since without your involvement, your credit report is simply a large collection of unverified information, the federal government has numerous consumer protection laws in place.

It is imperative that you understand that the only time information in your credit file is verified in any why is if you file a dispute with the credit bureaus.

When you file a dispute, the lender must prove that the item is accurate with in 30 days. If they do not confirm that the item is valid, the trade line is required by law to be deleted from your file.

There are many keys to maintaining a high credit score. One of the most important is consumer knowledge and active involvement in monitoring your score.