Credit BureauFinancial Dictionary -> Debt -> Credit Bureau
In order to get their information a Credit Bureau will have working relationships with the courts and their public records, various lenders, debt collection agencies and various other organizations which may have available information about a person's finances. All of this information is made available by law and a legal credit bureau will not obtain your financial information in an illegal fashion. A credit bureau may be held liable if they report a figure that is not in the public domain or is blatantly false.
The raw data is rarely given to a lender, to make it less personal and to make the process simpler. Instead a credit bureau will use various mathematical calculations to give a credit score, sometimes known as a credit rating. So instead of hoards of documents and records, the credit bureau will simply see if the person has a good credit rating or a bad credit rating and act accordingly.
A credit bureau may not just provide information to traditional lenders but also businesses such as car dealerships or other business that may offer credit terms on their sales. For example a lot of cars are sold on finance, so it would be in their best interest to get a credit rating on their customer.
Ironically if there is barely any information available about a person's credit, then that can sometimes have an even more negative affect than somebody with medium to poor rating. Using a credit card responsibly is a good way to raise your credit profile. It's actually better than not using one at all.