Although they don’t make lending decisions or determine your credit scores, the credit bureaus play an essential role in creating and maintaining the credit system. And if you’ve taken out a loan, used a credit card, or had an account sent to collections, there’s a good chance one (or several) of the credit bureaus have your information in its system.
USA TODAY Blueprint may earn a commission from this advertiser.
Ad
Up to 68% OFF Summer Sale
Aura Individual
Price
$9 per month billed annually or $12 per month billed monthly
ID Theft Insurance
Credit bureau monitoring
Equifax, TransUnion, Experian
Via Aura's website
Price
$9 per month billed annually or $12 per month billed monthly
ID Theft Insurance
$1 million¹
Credit bureau monitoring
Equifax, TransUnion, Experian
Disclosure
¹$1,000,000 Identity Theft Insurance for Eligible Losses: Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group‚ Inc.. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.
No one can prevent all identity theft or monitor all transactions effectively.
What are the top three credit bureaus?
The three major consumer credit bureaus in the United States are Equifax, Experian and TransUnion. Collectively, they’re sometimes called the three nationwide credit reporting companies or credit reporting agencies. They’re also commonly referred to as credit bureaus.
Although people often clump the credit bureaus together when discussing credit, the companies are competitors. Each of the three credit bureaus creates and maintains its own credit files — databases filled with information about consumers and the consumers’ history with credit.
How credit bureaus work
Focusing on their role within consumer credit reporting, the credit bureaus primarily collect and organize data about consumers. The credit bureaus sell credit reports, a compilation of the information they have about a single consumer, to organizations and people. They also sell additional products and services, including credit scores based on their credit reports.
Most of the information in the credit bureaus’ credit files comes from other companies, such as banks, lenders, credit card issuers and collection agencies. Collectively, these organizations are called data furnishers.
When you apply for a new credit account, the company with which you’re applying for the account might request a copy of your credit report from the bureau and report the information from your application to the bureau — such as your name, address and Social Security number. If you aren’t already in that credit bureau’s system, the application could trigger the creation of your credit file using this personal information.
Once you have an open account, the creditor may also send updates to the credit bureau. For example, every thirty days, it might report your account’s current balance, most recent payment, and any changes to your account or personal information.
The credit bureaus also collect (or work with a third party to collect) information from public records. Public records used to include judgments and liens, but the only public records you’ll find on credit reports today are bankruptcy filings. However, creditors can still buy the other types of public records with supplemental reports.
Why are my credit reports different?
Your credit reports from Equifax, Experian, and TransUnion might be different because some data furnishers only report to one or two of the bureaus.
Data furnishers aren’t required to report information to any of the bureaus — they can choose which bureaus to report to, if any, and which information to send. For example, if you open a credit card with your local credit union, the credit union might only report your account to TransUnion. As a result, the account won’t appear in your Equifax or Experian credit reports.
Credit reports can also be different because creditors commonly only check one of your credit reports when you apply for a new credit account. The credit check can lead to a soft or hard inquiry — a record of the credit check — that’s only added to that report.
Additionally, some services now let you opt in to adding information to your credit reports. For example, you can use Experian Boost to add on-time payments for certain services such as rent and eligible streaming subscriptions to your Experian credit report. These payments might increase credit scores that are based on your Experian credit report. But the payments don’t get added to your other two credit reports and won’t affect scores based on those reports.
How lenders use your credit report
Lenders often request your credit report when you first apply for a loan and regularly review your credit report to help manage your account.
When you’re applying for a loan, the creditor might use your credit report and a credit score based on the report to help determine your creditworthiness. Along with other information from your application, such as your income, they can decide whether to approve your application and your offer’s terms.
Once your account is open, the lender might periodically report your account information and monitor your credit reports. For example, if you have a line of credit, the creditor might lower your credit limit if it sees you’re having trouble making your other payments.
Disputing credit report errors or inaccurate information
Although the information in credit reports is largely accurate, errors can occur. These can happen when data furnishers report inaccurate information to the credit bureaus, when credit bureaus don’t remove incorrect or old information or when credit files of two people who have similar personal information get mixed up.
If you find an error or inaccurate information, you can send a dispute to the credit bureau. The easiest way to do this may be through the bureau’s online dispute systems: Equifax, Experian, and TransUnion all offer the ability to file a dispute online. The bureau will then investigate your dispute and either update, delete or verify the information.
Other credit bureaus to know
Equifax, Experian and TransUnion are the main nationwide credit bureaus, but they aren’t the only bureaus or consumer reporting companies.
Innovis is sometimes called the fourth credit bureau, and it similarly collects consumers’ credit data. However, companies primarily use Innovis’s credit reports for identity verification and fraud detection instead of assessing credit risk.
There are also dozens of specialty credit reporting companies that collect and sell data. Some of these specialize in certain types of information, such as medical, rent, or utility payments. Others focus more broadly on a non-credit industry, such as insurance or employment screening.
The Consumer Financial Protection Bureau (CFPB) maintains a list of these consumer reporting companies. As with your consumer credit reports, you may have the right to a free copy of your report from each of these companies at least once every 12 months. You may also be able to freeze your report with some of the companies to help protect yourself from identity theft. The CFPB report includes information on how to request these reports and freezes.
Why your credit score is important
Credit scores are important because many companies will base your credit offers on your score. They might require you to have a minimum credit score to qualify for a loan or credit card and use your score to help determine how much interest or fees to charge you.
FICO and VantageScore create the commonly used credit scoring models that analyze your credit reports and generate scores. Creditors buy these scores from Experian, Equifax or TransUnion, but the bureaus don’t create or determine the scores.
Frequently asked questions (FAQs)
All three of the major credit bureaus — Equifax, Experian, and TransUnion — are important. Creditors can choose which of your credit reports to request and use when you apply for a new credit account, so no bureau is more important than the others.
There are many types of credit scores and each of your scores is based on the information from one of your credit reports. Your credit scores can vary depending on the type of score and which underlying credit report it’s analyzing. Scores might use different rules or data and some could be more predictive than others, but they’re all accurate.
Banks and other lenders might request your credit report from different credit bureaus depending on different factors, such as where you live and the company’s current agreement with the credit bureaus. If they can’t get your credit report from one bureau, they might attempt to get it from another.
Creditors can set their own ratings for what they consider to be a good credit score, and the result may partially depend on the type of credit score. However, in general, a credit score in the high 600s is considered a good credit score.
Credit rating agencies are generally companies that assess the creditworthiness of other companies and financial products. The big three ratings agencies are S&P Global Ratings, Moody’s and Fitch Group. The big three consumer credit bureaus — Equifax, Experian, and TransUnion — create consumer credit reports that companies can use to assess the creditworthiness of individuals.
