Did you know you actually have three credit scores? That’s right. There are three credit bureaus in the US -- Equifax, Experian and TransUnion -- which each compile your financial activity into credit reports that are then used to create your credit scores.
Your credit scores help lenders decide whether to approve you for a credit product. They’re, for better or worse, very important to your financial life. That means it’s important to understand all you can about them -- including the institutions that help create them.
Read more: The Best Credit Monitoring Services
What is a credit bureau?
A credit bureau, or credit reporting agency, is a private company and not a government entity. Credit bureaus compile and sell information about your payment and borrowing history -- usually to lenders or other parties who want to know your creditworthiness or how likely you are to be approved for a loan or credit account.
Each of the credit bureaus also offers paid services to consumers, including ones that monitor your credit and help you prevent or deal with identity theft. Two of the three even offer pretty worthwhile free credit monitoring services.
What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act regulates how Experian, Equifax and Transunion collect your financial information and with whom it can be shared.
It also provides you with the right to know what’s on your credit report. It offers additional protections like the right to find out if your credit profile was used against you to deny you for a new account. You also have the right to dispute errors on your report.
How do credit bureaus work?
The three credit reporting agencies don’t make lending decisions. Instead, they provide lenders and creditors with details about your credit history. They also help credit scoring companies like FICO and VantageScore generate your credit scores. It’s worth noting that VantageScore is owned and operated by Experian, Equifax and Transunion, but FICO -- Fair Isaac Corporation -- is its own independent company.
When you apply for items like credit cards, personal loans, car loans or apartment leases, lenders typically request a credit report to assess your credit risk.
But the lender might only work with one or two of the credit bureaus. As a result, your credit reports can look slightly different across all three bureaus, may have different items on them, and your credit score may vary between the three bureaus as well.
Make sure your credit reports at all three agencies are accurate by reviewing them at least once a year.
Why are there three credit bureaus?
When lending institutions first started monitoring consumers’ credit, the job was originally performed by local agencies. The process became automated over time, and local agencies were consolidated into the three major regional companies we have today.
At first, Equifax was responsible for states in the South and East, Experian for those in the West, and TransUnion for those in the Midwest. Now, all three credit bureaus are nationwide.
What’s different between Equifax, Experian and TransUnion?
The three credit bureaus all perform similar functions and offer a similar selection of products and services. However, there are some differences in where each company is based, the way they calculate credit scores and their product offerings.
The chart below shows the main differences between Experian, Equifax and TransUnion:
| Experian | Equifax | TransUnion | |
| Headquarters in North America | Costa Mesa, California | Atlanta, Georgia | Chicago, Illinois |
| Primary scoring model | FICO credit score range of 300-850 | Credit score range of 280-850 | FICO credit score range of 300-850 |
| Offers credit report monitoring services | Yes | Yes | Yes |
| Free credit score | Yes | Yes | Yes |
What’s on your credit report?
According to the Consumer Financial Protection Bureau, your credit reports include basic personal information about you including your name, your address, your date of birth and your Social Security number (SSN). Your reports also show the following:
- The amount and balance of any loans.
- The credit limit and balance on any credit cards.
- The status of either of the above, including whether you’ve made payments on time and when your last payment occurred.
- Items sent to collection.
Who can see my credit report?
The Fair Credit Reporting Act, or FCRA, limits access to your credit report to agencies that demonstrate a “permissible purpose,” or a legitimate reason for wanting to see your credit history.
Examples include:
- Credit card issuers
- Potential lenders
- Existing creditors
- Debt collection companies
- Insurance companies
- Rental companies and landlords
- Internet, phone and utility companies
- Certain government agencies
Prospective employers can request a credit report, but only with your written consent.
How lenders use credit reports
Lenders may pull your credit report to assess your creditworthiness. This offers them a look at your previous payment history and account usage, which helps them determine whether you’ll be a responsible borrower.
Lenders also use information in your credit reports to decide the terms and conditions you’re eligible for, including interest rates and fees you’ll need to pay to borrow money. The higher your credit score, the more favorable terms you’ll get. If your score is lower, you’re more likely to end up with higher interest rates and fees.
Where do credit bureaus get their information?
Banks, credit card companies and other lenders routinely send information to the agencies. In fact, credit card companies and lenders typically report your balances and payments to the credit bureaus once per billing cycle. This is why it’s easier to build credit when you have some credit already.
Credit bureaus can also access court judgments, liens, bankruptcies and other public records.
How do I get a copy of my credit report?
You can request a free copy of your credit reports from Experian, Equifax and TransUnion every week. You can request all three credit reports at AnnualCreditReport.com.
FAQs
Each credit bureau report is just as accurate as the next since they all list the information lenders decide to report to them.
However, your credit reports from any of the bureaus may have errors or inconsistencies. Checking your credit reports regularly is the best way to find these errors so you can formally dispute them and have the information corrected.
First, each credit bureau may have different information, since not all lenders report information to all three.
Second, each bureau calculates credit scores in its own unique way. The type of credit score you’re accessing -- typically either FICO or VantageScore -- can also play a role in why your score is higher or lower with any given credit bureau.
Editors’ note: An earlier version of this article was assisted by an AI engine. This version has been substantially updated by a staff writer.
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