Experian, TransUnion and Equifax are the three major credit bureaus in the United States. Credit bureaus are private companies that compile data for your credit report. Because your credit report gives information to potential lenders and can impact whether you’re approved for a loan or a credit card, it’s crucial to know how credit bureaus operate.
In this guide, we’ll break down what the credit bureaus do, how they score you and other important information.
What Does a Credit Bureau Do?
Credit bureaus compile data about your credit history to form a credit report. The information on your credit reports includes personal data like your name, mailing address and a list of your employers, as well as credit accounts like loans and credit cards.
When a lender evaluates you, they go to one of the three main credit bureaus for a report. Any potential lender or employer can only receive your credit report with your permission. Your credit report won’t include information like your age, race, or marital status.
What You Should Know About Each Credit Bureau
The three major credit bureaus are Equifax, TransUnion and Experian. As private companies, they each have their own way of collecting credit history data from a variety of sources.
Here’s what to know about each credit bureau:
- TransUnion: Starting in 1968, TransUnion acquired and then expanded its library of credit files. By 1988, they had an active credit profile for almost every consumer in the country.
Now operating in 33 countries, TransUnion offers CreditCompassTM recommendations which help you point your score in the right direction. They also provide Credit Lock services to protect your report from criminals.
- Equifax: Formed in 1899, Equifax began as a group of tailors from Great Britain who swapped information about consumers that didn’t pay their debts. In 1965, it became a publicly held corporation. Equifax offers credit report monitoring, social security number scanning, and discounted family plans.
- Experian: Founded in 1826, Experian is the oldest credit bureau. Experian now operates in 37 countries. They provide special services like Experian BoostTM and identity theft monitoring.
How Do Credit Bureaus Get Your Information?
The three main credit bureaus—Experian, Equifax, and TransUnion—have access to the credit history of millions of people. They obtain this information from banks, loan companies, retailers and other lenders. The companies that report information are known as data furnishers.
Credit reporting is voluntary and not all companies do it. Those that report might do so at different times of the month, and some only report if you’ve missed a payment. Some companies report only to one or two of the three credit bureaus.
Where credit bureaus can get information:
- Mortgage lenders: If you currently have a mortgage, or have paid one off in the last ten years, your lender will probably report your mortgage, how much you still have to pay and your monthly payment history.
- Credit card companies: Many credit card companies report to the credit bureaus. Expect to see any active credit card accounts on your credit report, as well as any you’ve closed in the last six years.
- Retailers: If you’ve been given a store card by a retailer you can expect them to report the information.
- Loan companies: If a Loan company reports to the bureaus, they will provide the balance of your loan, the amount due, the amount paid and the status of your account.
- Telecommunications companies: Your mobile or internet bills could show up on your credit report, depending on the company.
- Student loan companies: In our experience,student loan companies report information to the credit bureaus. Deferred payments also show up.
- Peer-to-peer lenders: Peer-to-peer loans may appear on your credit report, even though there isn’t a fixed repayment period.
- Collection agencies: If your account has fallen into the hands of a collection agency, then it may be reported to the credit bureaus.
- Courts: Public records are available to the credit bureaus, so your report will likely show if you filed for bankruptcy or have judgments against you (including settled ones).
- Landlords: Not all landlords report payments to the credit bureaus, but it’s becoming more common.
Where credit bureaus can’t get information:
- Small businesses: A small business is unlikely to become a data furnisher. The Fair Credit Reporting Act has requirements for any company wanting to become a data furnisher, and the process is costly and lengthy.
- Friends, family and business partners: Similarly, there’s no way that a friend, family member or someone you work with can become a data furnisher and report something you owe them.
- Medical companies: Medical companies are unlikely to report any medical debts you have unless you’ve missed payments.
- Utility companies: Utility companies are unlikely to report to the credit bureaus if your account is up-to-date. If you fall behind on payments, it may show up.
Why Are My Scores From the 3 Credit Bureaus Different?
Your scores from the three credit bureaus can be different because they each obtain and score data differently. Each bureau has its own methods and partners for collecting information, including the purchase of public record information, such as tax liens and judgments.
The vast majority of the data collected by the credit bureaus is reported to them by banks, credit unions, credit card issuers, auto lenders, mortgage providers and retailers.
Creditors are under no obligation to report information to any of the credit bureaus, let alone all three of them. This means you may have accounts that show up on a single credit report, but not the others.
For those attempting to rebuild credit—after credit repair or undergoing a bankruptcy discharge, for example—it’s important to realize that only after information has been reported to the bureaus can it help. For example, credit cards can help rebuild your credit, but only when payments are reported.
Why Should I Check All of My Reports?
You should check all three of your credit scores because the report generated by each bureau may contain different information and a different score.
Depending on the lender or bank you’re trying to get approval from, they may be accessing all of your reports or only one or two of them. Knowing what your reports look like can give you a clear prediction of whether you’ll be accepted.
Reviewing all three reports also lets you know if there are errors. There might be an inaccuracy that shows up on one of your reports, but not the other. Ensuring all three of your reports are accurate can help you maintain a good credit standing.
How Do I Get a Free Credit Report from all 3 Credit Bureaus?
You can get a free credit report from all three bureaus by visiting annualcreditreport.com. Each credit bureau gives you a free report every year, so if you spread out when you get your reports, you can get a free credit report every four months.
Are There Other Credit Bureaus?
Besides the three main ones, there are other credit bureaus in the United States. They are reporting agencies that specialize in compiling reports, and many people are unaware that they exist. Unlike the big three credit bureaus, which are required to provide credit reports annually at no cost, these reports don’t fall under the FCRA.
Here are some other credit bureaus:
- ChexSystems: This bureau collects consumers’ banking information, such as savings and checking account information (which is not included in the three main credit reports). With ChexSystems, a bank or credit union can pull information on past activities such as overdrafts and bounced checks.
- LexisNexis: This bureau issues a report called Comprehensive Loss Underwriting Exchange (CLUE). The report is used by insurance companies and keeps track of property losses (such as cars and homes). It’s pulled when you’re looking to change insurance companies so they can see how likely you are to file claims.
- Business-related credit bureaus: Like consumers, businesses also have credit scores. Experian and Equifax provide credit scores for businesses as well as other specialized credit bureaus such as Moody’s and Dun & Bradstreet.
Disputing Your Information with the Credit Bureaus
When reviewing your credit reports, be on the lookout for errors and fraudulent activity. These negative marks can hurt your credit score, even though they should have never been there in the first place.
Get them resolved by filing a dispute as soon as you can, ideally within 30 – 45 days. You’ll need to file a dispute with each bureau to make sure it’s corrected on each report. If you need help, you can contact FreshCredit® to learn how our credit repair services can help you through this process.