Credit bureaus, or credit reporting agencies, collect information about consumers' financial affairs and sell the information to their clients, such as credit grantors, employers, and insurance companies. These agencies obtain information from various sources, including loan applications; public records which provide information related to such matters as bankruptcy, court judgments, and conditional sales contracts; and from credit grantors and collection agencies who provide credit files on a monthly basis. These files contain information such as the account number, the outstanding balance, and a nine-point rating scale, for example: R1 indicating that payment was made on time; R2 that payment was made 30 days late, but not more than 60 days; and R9 indicating a bad debt or one that has been placed for collection and it also applies to bankruptcy.
It should be noted that your credit rating is set by your creditors. Credit bureaus only pass on that information to their clients. The decision as to whether or not to grant credit to an applicant is made by the credit grantor, not the credit bureau. It is the lender's individual credit scoring system that determines access to credit.