When it comes to banking, there’s a lot more to know than what meets the eye. Banking isn’t just about saving money in an account, getting interested, and withdrawing it. Not all banks and institutions are created equal. Different banks also have different services.
Some banks cater to people while some cater to companies. Whether you’re planning a career in the banking sector or you’re just curious, a little knowledge can help you understand how the system works. Here’s a look at the five most common banking institutions in the USA:
National Banks
A national bank is a bank that’s been federally chartered by the government of United States of America. National banks are insured by the Federal Deposit Insurance Corporation. They offer any and all financial services that you can think of.
From checking and saving accounts, to money card services and offering loans and insurance, national banks have them all. Some banks that belong to this category are Bank of America, Citibank, PNC Bank, and Capital One.
Retail Banks
Retail banks offer consumer services directly to individuals. One of these services includes opening checking or saving accounts. They also offer credit card or debit card services. They also have loan and retirement services. As you can see from the name, these banks are helping individual customers with their banking services. A retail bank can be a local bank with no other branches as well. It can also be a branch of a commercial bank or local bank set up to provide services at a regional level.
Commercial Banks
Commercial banks offer products and services like fundamental investment schemes, business advances, bond investment schemes, overdraft facilities, and mortgage loans. These are profit-making enterprises. They offer the same services like retail banks. But commercial banks focus on businesses as customers. They can also offer short term loans.
Before the Great Depression, all commercial banks in the US were considered to be investment banks. After the banking system collapsed in 1929, the need to limit the operations of banks to one kind either investment or commercial arose.
In other countries, there are two types of commercial banks:
Public commercial banks, which are usually government owned. Their objective is overall development.
Private commercial banks which run solely on the motive of profit.
Investment Banks
An investment bank is a financial institution that handles securities transactions for their clients. They run on the revenue they get by doing transactions. This includes mergers and acquisitions, derivative trades, foreign money transactions, equities, and fixed-income instruments.
Central Bank Or The Federal Reserve
Like most other countries, USA has its own central bank. The Federal Reserve, or Fed, looks after all the banks and institutions in the country. Its work includes printing currency, helping other banks during monetary crises, protect everyone’s money, punish banks and other financial institutions for any kind of fraudulent behavior etc. They are a politically free entity and work independently.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.