Which term refers to agencies that collect information on how promptly people and businesses pay their bills?

• A. Debt Collectors
• B. Credit Bureaus
• C. Credit Reporting Agencies
• D. Banks

Answer: (B)

The key idea is that these entities gather and maintain records of how people and businesses handle their bills. They collect data from lenders about whether payments are made on time, outstanding balances, credit limits, new credit, and even certain public records. With this information, they produce credit reports that lenders use to assess risk and decide whether to extend credit or set terms. That collecting and organizing of payment history is exactly what gives them the label credit bureaus. While “credit reporting agencies” is also a common term for the same concept, the term most people use to refer to these data-collecting hubs is credit bureaus. Banks and debt collectors play different roles—they lend money or try to collect debts—whereas they don’t serve as centralized repositories for the array of payment history data that a credit bureau compiles.