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Credit Bureaus: Why the Three Major Agencies Matter

Equifax, Experian and TransUnion collect and sell data on U.S. consumers and their use of credit.
June 26, 2018
Credit Score, Personal Finance
Credit Bureaus: What They Are and How They Work
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Experian, Equifax and TransUnion are the three biggest credit bureaus that collect and sell data about you and how you have used credit in the past. If you have a credit card or have applied for a loan in the past couple of years, you probably have a credit file.

The information can be collected and sold without your consent. However, businesses that check your credit, such as credit card issuers and mortgage lenders, must have a legitimate reason to look at your credit file, and in most cases they must have your permission.

The information credit bureaus collect is typically used:

  • To calculate credit scores
  • In some pre-employment background checks
  • To evaluate lease applications
  • In setting some insurance rates
  • To decide whether you must pay a utility deposit

You have a right to see your credit reports and to dispute information that is inaccurate or should not be reported because of its age.


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How can I see my credit reports?

You can access your credit reports at AnnualCreditReport.com. It’s smart to make sure your identifying information and account information are correct.

Because credit bureaus operate independently, each may receive information from a different set of sources.

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.

What data do the credit bureaus maintain?

Your credit reports may contain:

  • Name
  • Birthdate
  • Social Security number
  • Address (and past addresses)
  • List of credit accounts
  • Payment records
  • Collections
  • Bankruptcies
  • Tax liens
  • A record of who has accessed your credit report

Where do credit bureaus get their data, anyway?

When you apply for a loan, credit card or lease, the information collected may be shared with the bureaus. They may receive additional information on those accounts, too, including whether you have late payments, and if so, how 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.

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, foreclosures, tax liens and court judgments.

What if I see a mistake on my report?

If you see an error, you can dispute it. That means you file a formal complaint and the agency must respond. 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.

Why doesn’t my report display a credit score?

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.

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.

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 which scoring model was used and whose data was used.

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