The three major credit bureaus are Equifax, TransUnion, and Experian. They collect and store information about you, and they use it to generate your credit reports and calculate your credit scores.
These three credit bureaus are frequently grouped. However, they are separate companies that compete for the business of creditors, who might use the credit reports and scores from these agencies to assist them in making lending decisions. And they are not the only credit bureaus out there, either.
Keep reading this post to learn how credit bureaus get the information they use to create your scores and reports, and how you can go about contacting them if you think something is wrong.
What are credit bureaus?
What are reporting agencies, and what are their purposes?
A credit bureau is sometimes known as a credit reporting agency. It is a business that collects relevant consumer information from creditors and then sells that information to interested parties like potential lenders. Creditors report to the CRAs regularly as to whether you are paying your bills on time. They report if you have ever paid thirty or sixty days later, or you have ever defaulted entirely. They also report how much you owe them. Such information is compiled in the form of a credit report.
The credit bureaus also collect relevant public records, such as bankruptcy information, from state and local courts. This information is incorporated in your credit report as well.
The information found in credit reports is frequently distilled into a credit score, and it is now this score that often determines if a consumer will get a loan. As a consumer, you can request your credit reports from the bureaus for free once a year. The CRAs sell consumer credit information to companies that have a legally valid reason for assessing it. For example, an organization with whom you have applied for credit would have a valid need to check your credit report. Landlords and employers cannot access your credit history without your written permission.
Before credit scores became widely used, potential creditors and lenders interviewed consumers directly to assess their creditworthiness. This technique was time consuming, prejudicial, and unreliable. Eventually, lenders started utilizing the scored credit reports to help them in making more impartial lending decisions.
Nonetheless, credit bureaus have been around for much longer than credit scores, which only became widespread in the 1960s.
The top three credit bureaus in the United States
In the U.S., there are various credit bureaus, but only three that are of major significance: Equifax, TransUnion, and Experian. These three bureaus dominate the market for collecting, analyzing, and disbursing information about consumers in the credit markets.
TransUnion Credit Bureau
TransUnion bureau was founded early in the 20th century in Chicago, IL, by a tank car company. It then branched out from there into credit reporting. Today, TransUnion is owned by private equity firms, Goldman Sachs Capital Partners and Advent International. The credit bureau operates 250 offices in twenty-five countries.
In case you are worried that you are a victim of identity theft or that you may be, you can place a freeze on your TransUnion credit report and then TransUnion will take the extra step of informing the other two CRAs that you have done so. You can also buy a credit monitoring subscription with this bureau.
Experian Credit Bureau
The Experian credit bureau got its start in London in 1970 when business people there started distributing information on customers who did not pay their bills. The businessmen formed the Manchester Guardian Society in 1827. Later it merged with competing credit bureau, Chilton, it was bought in the 1980s by GUS plc, and was soon renamed Experian.
The bureau is still the largest credit bureau in the world and employs more than 17,000 people in 41 countries. The Experian credit bureau uses the FICO 8 credit score calculation system. The company offers a Credit Tracker by subscription. If you subscribe, you will get your credit scores together with your credit report.
Equifax Credit Bureau
Equifax is the oldest credit reporting agency in the U.S. Originally known as Retail Credit Company, Equifax’s business developed quickly, expanding across the U.S. and parts of Canada by the 1920s. However, Equifax’s reputation was tarnished in 2017 when it was hacked and was subjected to a data breach that disclosed the critical personal information of 143 million customers.
Since then, Equifax has made a tool available on its website where you can check if you were affected. The bureau also tried to make amends by providing a free credit monitoring service to the consumers whose information was breached.
Equifax provides credit fraud protection and identity theft protection to consumers, together as selling credit reports to the business. It gives both their VantageScore and FICO credit scores to consumers for a fee as well.
Common factors of the three credit bureaus
Most of the things are the same with the credit reports and scores among the three credit bureaus. Below is an outline of the common factors.
The information they intake is almost identical
The three credit bureaus produce their credit reports for each adult consumer, including using the same types of information, including:
- Public information, such as tax, judgments, and bankruptcies.
- Personal information such as Social Security Number (SSN), your full name, current, and past employers, and birthday
- A list of businesses and people who you have requested access to your credit report
- Credit account information includes a list of current and previous accounts, account activation dates, creditors, payment history, credit limits, and monthly amounts.
Mistakes on consumer credit reports
No organization is perfect; this includes the credit bureaus. The leading three credit bureaus are sometimes guilty of reporting inaccurate and false information on consumer credit reports. Often, they are not the real culprit, but the information providers, regularly the creditors and courthouses, who sometimes fail to meet the standards of accuracy, substantiation, and fairness before reporting information about you to the bureaus.
Governing laws of Credit Report Bureaus
Contrary to popular belief, credit bureaus are not government bureaus. The federal government has law- the Fair Credit Reporting Act- that regulates how these and other credit bureaus can and must operate.
They are subjected by the Federal Trade Commission and the applicable consumer protection statutes. Consequently, you have a right to view and challenge the information found on each of your credit reports, irrespective of who supplies them.
How are the three credit bureaus different?
Why are my scores different in the three credit bureaus?
Information is regarded as a credit reporting agency’s similarity and difference. Credit bureaus frequently have business relationships with the same credit card issuers, banks, and even other businesses that you may have accounts with, but they are separate entities.
Your credit account history will appear on one or all of your credit reports from these bureaus as a result of their connections, but credit agencies do not share your account information. Fraud alerts are exceptions to this principle. Creditors often establish relationships with specific bureaus, deciding to report information to them exclusively. As a result, an account that appears on your Experian report might be missing in the TransUnion report.
When it comes to credit scoring systems, each credit bureau licenses slightly different credit scoring algorithms from FICO Corporation. Those are the credit scores that are almost always shown to potential lenders. Also, each of the bureaus produces a non-licensed internal score that they frequently offer to consumers.
Note that when potential lenders and creditors check your credit, they might pull one bureau’s credit report instead of all three. It is usually less expensive for a business to check just one credit report. Therefore, it is essential that you periodically review your credit reports from as many agencies as you can to make sure that everything is accurate.
How do the three credit bureaus get your credit information?
Where do credit bureaus get their information?
The information that the credit bureaus collect comes from various sources.
Information reported to the credit bureaus by lenders and creditors
Creditors like banks and credit card issuers may report information about their accounts and clients to the credit bureaus. In this context, the creditors are also called data furnishers.
Information that is bought or purchased by the bureaus
For some kind of information, the credit bureaus purchase the data. For instance, a consumer credit bureau may buy public records data from LexisNexis, another credit bureau, and use this information when developing your credit report. Examples of information that the credit bureau can purchase include bankruptcy records and government tax liens.
Information that gets shared among the credit bureaus
Even though they are competitors, sometimes the credit bureaus should share information. For instance, when you place an initial fraud alert with one of the credit bureaus, it is required that you forward the alert to the other two.
Why do we have 3 credit bureaus?
Necessarily there are three bureaus since each one would historically serve a geographical area. The bureaus have since bought other, smaller credit reporting agencies until they become nationwide organizations.
You can think of the same analog for grocery store chains. They all sell the same things, they began as much smaller ventures in specific regions and have since grown to national sizes.
What are the other credit reporting agencies?
Credit report organizations
TransUnion, Experian, and Equifax may be the big three, but there are many consumer credit bureaus. Typically, the Consumer Financial Bureau has a list of consumer credit reports organized by the kind of information they organize and offer.
Some credit reporting agencies specialize in specific kinds of reporting, so certain lenders or organizations are more included to buy reports from them then from the others. For instance, some specialize in screening potential employees, whereas others manage rental histories for landlords.
Note that the specialized agencies may not collect all information regarding your credit report, but only the information that is relevant to their specific scope.
Other credit bureaus that might want to know about
- The NCTUE, National Consumer Telecom, and Utilities Exchange: The bureau collects and shares information for telecommunications, utility industries, and pay-TV.
- ChexSystems bureau, which collects and reports information on closed checking and savings accounts
- Comprehensive Loss Underwriting Exchange- C.L.U.E is owned and managed by LexisNexis®. It collects insurance-related information and creates consumer auto and personal property reports. An insurance organization uses these when setting consumer’s insurance premiums.
- Innovis bureau, which offers data that will confirm your identity for purposes of fraud prevention and detection
- MicroBilt or PRBC which serves predominantly subprime lenders who are willing to extend loans to low-income individuals and those with poor credit
How do I get a free credit report from all 3 credit bureaus?
You have a right to check your credit reports, and you are entitled to get a free credit report from all three agencies once a year. To request your credit report, call 877-322-8228 and AnnualCreditReport.com.
You can also appeal for a copy of your report at no fee in case you have been turned down for credit. However, you have to request within sixty days of being declined. You can buy additional credit reports directly from any of the CRAs at any time. That is in case you want to check where you stand more than once a year even though they are separate entities, two of the major bureaus, Experian and Equifax-provide credit reports, which include some information from the three credit bureaus in a single document.
You must buy your credit score separately from your credit report. Your score is obtained from the information in your credit report.
Can you dispute inaccurate information on credit reports?
Disputing credit information in your report in the three credit bureaus
You have the right to dispute inaccurate information in your reports and with data furnishers. In accordance with the Fair Credit Reporting Act, the consumer reporting organization and the company that furnished the information to the credit bureau should conduct a free investigation to verify the data and correct the error, in case they find one.
You might want to reach a credit bureau directly to dispute inaccurate information you have discovered in your report. It is essential to contact the creditor or company that submitted inaccurate information as well. Do it in writing and keep copies of all correspondence.
You can contact by calling 800-909-8872 or sending snail mail through P.O BOX 2000, Chester, PA 19016. Also, Credit Karma members can dispute information in their TransUnion credit reports using Credit Karma’s Direct Dispute tool.
For Equifax, reach them out on their website or calling 800-685-111. You can also send snail mail at P.0. BOX 105788, Atlanta, GA 30348-5788.
To dispute credit information on Experian, send a mail at P.O. Box 9554, Allen, TX 75013, or call 888-EXPERIAN (397-3742). It is recommended to use a mail or electronic disputes since you will have a paper trail.
Security freezes and fraud alerts
You can also contact any of the credit bureaus to place a fraud alert or credit freeze on your credit report in case you have reason to believe that you are a victim of identity theft.
You will not want to apply for credit if you apply a credit freeze since it blocks access to your report. The creditor or lender will not access your report. The service is often free, and you can remove the freeze at any time. There are steps to lift the freeze when you want businesses to reassess your report.
Placing a fraud alert works the same way as a security freeze, but it only stays in effect for ninety days. A fraud alert is free, but you might have to pay to place a security freeze in some states. In case you think there is a problem, it is a good idea to freeze your account with the three credit bureaus.