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Understanding the Three Major Credit Agencies: Experian, Equifax and TransUnion

Credit bureaus compile and sell consumer credit reports.

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Your credit score may vary depending on where it comes from. There are three major credit bureaus that grade your credit history: Experian, Equifax and TransUnion. They use different scoring models with varying metrics to calculate credit scores. Each credit reporting agency, or credit bureau, assigns you a different score based on how it compiles your information. 

What are the three credit bureaus?

The three major credit bureaus -- Equifax, Experian, and TransUnion -- are responsible for collecting and maintaining consumer credit information for millions of people and businesses. They compile credit reports and scores based on the data from the lenders you work with to get loans or revolving credit. The three bureaus are private companies regulated under the Fair Credit Reporting Act and monitored by both the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). 

Equifax

Equifax was founded in 1899 as Retail Credit Company, becoming one of the nation's largest credit bureaus by the 1960s. Aside from compiling and monitoring consumer credit information, Equifax provides credit solutions like consumer credit monitoring, identity theft protection, financial marketing, and analytical services. 

Experian

Experian analyzes, processes and maintains consumer data on over 245 million US consumers and 25 million US businesses. Like Equifax, they offer credit monitoring, free credit scores and financial tools to help consumers make informed financial decisions. 

TransUnion 

TransUnion gathers information on credit history to generate credit reports for hundreds of millions of people in more than 30 countries. Aside from credit reporting, TransUnion offers credit monitoring, free credit tools and identity theft protection. 

What data is collected by the major credit bureaus?

According to the Consumer Financial Protection Bureau, credit reporting agencies gather information about a person's borrowing and repayment history, including

  • Current and past credit accounts
  • Hard inquiries
  • Account balances
  • Payment history
  • Credit limits
  • Accounts in collection

How do the three credit bureaus get your information?

The credit bureaus collect information from financial institutions and lenders who voluntarily send information, including:

  • Banks and credit unions
  • Credit card issuers
  • Debt collection agencies 
  • Auto lenders
  • Mortgage lenders

Credit bureaus also utilize and include information from public records, such as:

  • Tax liens and other property records
  • Bankruptcy filings
  • Court records 

Are credit reports private?

A federal law enacted under the FCRA heavily restricts and limits how the bureaus collect and share consumer information. Though the bureaus have the right to pull data on consumer credit without a person's permission, credit card issuers or other businesses must have a "permissible purpose" to obtain your credit report. Examples include subpoenas or court orders, employment purposes with consumer authorization, credit transactions and tenant screenings. 

Why do you have different credit scores?

You can have a different credit score from each credit bureau because each bureau measures and maintains consumer data differently. For example, each credit bureau may use a different scoring model to calculate your score. Plus, not all lenders report to all three major credit bureaus, so there could be missing information that impacts your score.

How to check your credit report

By law, you can access a free copy of your report once every 12 months from each of the three major credit bureaus. But each bureau currently allows you to check your report once a week for free until Dec. 31, 2023. You can do this by visiting AnnualCreditReport.com

When reviewing your credit reports and scores, it is important to inspect each bureau's report separately, as there could be differences in the details reported by each agency. If you come across incorrect information, there's a formal process you can use to dispute an error on your credit reports. Per federal law, a bureau has to address an error if they find one on your credit report. 

The bottom line

The three major credit bureaus provide credit reports and scores to lenders to help them make informed lending decisions. Understanding how the bureaus work is one piece of the puzzle, but understanding how credit scores are determined and maintaining a good credit score is another piece necessary to have the tools you need in your financial journey. 

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