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Credit Bureaus: What They Are and How They Work

The three major credit bureaus are Equifax, Experian and TransUnion. They maintain files showing how millions of U.S. consumers have handled borrowed money.
Credit Score, Personal Finance
Credit Bureaus: What They Are and How They Work
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Experian, Equifax and TransUnion are the trio of companies commonly referred to as the “three major credit bureaus.” There are many more bureaus, but these are the main ones that lenders, insurers and landlords use to decide whether they want to work with you.

The bureaus, also called credit reporting agencies, collect data on how you have repaid credit lines such as car loans and credit cards in the past and then sell that data to businesses. Such businesses must have a legitimate reason to look at your credit file, such as assessing your application for a credit card or a lease.

The Fair Credit Reporting Act gives you the right to see your credit reports and to dispute information that is inaccurate or should not be reported because of its age. That typically includes negative marks that are more than seven years old, except for personal bankruptcy, which can be reported for up to 10 years.

What are the three major credit bureaus?

Equifax

Founded in 1899 as the Retail Credit Co., it changed its name to Equifax in 1976. It is listed as EFX on the New York Stock Exchange. It’s based in Atlanta and, according to its website, has about 10,100 employees worldwide. In 2017 it suffered a data breach that exposed personal financial information of nearly 148 million U.S. consumers. 

Experian

Experian, the largest of the credit bureaus, traces its beginnings to 1968, when a company called TRW acquired Credit Data of San Francisco. TRW spun off the company now known as Experian and it was purchased by a British company in 1996. It maintains credit information on 220 million U.S. consumers and is listed on the London Stock Exchange as EXPN.

TransUnion

A railcar leasing company called Union Tank Car Co. created TransUnion as a holding company in 1968, then entered the credit data industry the next year by purchasing the Credit Bureau of Cook County (Illinois). According to its website, it now has 4,100 employees and maintains “more than 200 million files profiling nearly every credit-active consumer in the United States.” It is listed on the New York Stock Exchange as TRU.

Where do credit bureaus get the data?

When you apply for a loan, credit card or lease, the information collected, such as your name, address and Social Security number, may be shared with the bureaus. They may receive additional information on those accounts, too, including whether you have any late payments. Your information is recorded in a format standard to all three bureaus, for example whether you have late payments that are classified as at least 30, 60 or 90 days late. 

Lenders are not required to report to credit bureaus, but data on how borrowers have handled credit cards and loans in the past helps them make lending decisions, so most do.

Data also comes from public records. That can include bankruptcy filings, liens and court judgments.

While utility companies do not share your personal information with credit bureaus, if you are delinquent on your account and it is sent to collections, that can appear on your credit reports.

Data also comes from public records. That can include bankruptcy filings, liens and court judgments.

How can I see what’s in my credit reports?

You have a right to get a copy of your credit report from each of the three major credit bureaus at least once every 12 months. You can access them at AnnualCreditReport.com. Check to make sure your identifying information and account information are correct.

You can also check a shortened version of your credit report on some personal finance websites, like NerdWallet. NerdWallet’s credit report displays TransUnion data and goes back two years; the ones from all three bureaus via AnnualCreditReport.com typically cover a longer period. 

Because credit bureaus operate independently, each may receive information from a different set of sources. It’s important to check all three reports.

Because credit bureaus operate independently, each may receive information from a different set of sources. It’s important to check all three reports. You won’t get to decide which one or ones a potential creditor checks. In many cases, they pull only one credit report or credit score, because each credit inquiry costs money.

Will my report display a credit score?

No. While the law requires the credit bureaus to let you see the information in your credit reports, there is no such requirement for credit scores.

There are hundreds of credit scores, but the two main ones are FICO and its competitor VantageScore, which was developed jointly by the three main credit bureaus.

Scores are created by running the information in your credit reports through a mathematical formula designed to predict how likely you are to repay debt. Because the bureaus may have slightly different datasets, your scores may vary depending on whose data was used.

What if I see a mistake?

If you see an error, you can dispute it. That means you’ll file a formal complaint and the agency will respond. Removing incorrect, negative information could benefit your credit scores.

Each credit bureau has a slightly different procedure for disputing.

It’s important to fix a mistake with all three major bureaus, because credit reporting agencies do not share information.

The single exception is if you request a fraud alert. You can contact any of the major credit reporting bureaus, and it will contact the other two. You can do this by phone, online or by mail:

  • Equifax: 888-766-0008; Equifax Consumer Fraud Division, P.O. Box 740256, Atlanta, GA 30374
  • Experian: 888-397-3742; Experian, P.O. Box 9554, Allen, TX 75013
  • TransUnion: 800-680-7289; TransUnion Fraud Victim Assistance Department, P.O. Box 2000, Chester, PA 19016

Updated March 1, 2018.

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