Credit Bureaus

What is a credit reporting agency?

Credit reporting agencies (also known as credit bureaus or consumer reporting agencies) that collect information relevant to your credit and financial history. There are three credit agencies: TransUnion, Equifax, and Experian. When you apply for a loan, request an increase on your credit limit or even apply for a new job, your credit report will likely come into play. The three credit agencies collect and house the information that helps potential lenders or employers rate your reliability.

Why are there three credit reporting agencies?

Credit reporting has existed for over a century, and in the early days most communities had a local credit agency. When lenders needed a credit report, they contacted the closest credit agency. Over time, as credit reporting became automated, the local credit agencies were consolidated into the three major regional companies. TransUnion serviced the Central U.S., Experian the West, and Equifax managed the South and East. Today, each of the credit agencies has a national presence.

What are the differences between the credit agencies?

Each of the credit agencies offers slightly different services. For example, TransUnion is the only credit agency that offers Identity Lock, a service that helps you protect yourself against identity theft. Also, not all venders report to all three credit agencies. This means that the information on your credit report can vary from agency to agency, resulting in different scores.

What is VantageScore?

VantageScore is a system for calculating credit scores that uses letter grades instead of numbers. This makes it easier for consumers to understand their scores. In an effort to more adequately represent the modern economy, VantgeScore made significant changes to how information is gathered and weighted. For example, your payment history is now measured in terms of the last two years. It used be only the last six months. This is a big change, especially if you haven’t been financially active in the recent past. Financial lulls due to retirement or temporary unemployment won’t hurt you the way they did in the old days.

Business Loans

Credit bureaus, also known as credit reporting agencies (CRAs), are recognized for aggregating, synthesizing, and maintaining consumer credit history. These carefully collected reports are sold to concerned parties such as lenders or creditors. Credit bureaus obtain their information from data furnishers, typically these sources include creditors, debt collection agencies, and courts. The major credit bureaus are for-profit, non-governmental agencies. They compile raw data and generate profiles known as credit reports.

Information Collected

Credit bureaus gather the available data about your current credit accounts and payment history from a multitude of institutions such as mortgage lenders, banks, credit card issuers, and other financing groups you may have done business with in the past. Non-lending organizations like telephone and utility companies may also report information to credit bureaus, however, these businesses generally only report negative information such as late payments and an account sent to collections. The credit bureaus also collect personal information, aliases, employment information, and of course a history of who is checking your credit – credit inquiries.

The Credit Report Profile

The amount of data being collected on a regular basis is astonishing. The credit report profile is extensive and thorough. Credit reporting was designed to hold people accountable, which highlights the good and bad in relation to consumer borrowing tendencies. Paying loans and debts on time helps improve the quality of the profile and builds scoring momentum. Negative credit reporting can consist of 30-60-90-120 day late payments, collections, charge offs, repossessions, foreclosures, and of course public records – judgments and tax liens. Five important factors within your credit profile strength: (1) How long you’ve had credit, (2) repayment history, (3) amount of debt, (4) types of accounts in your credit file, (5) the number of hard inquiries on your file. Credit bureaus also track and record non-credit information including your salary information, current and previous employers, and addresses. While this information does not play a role in determining your credit score, lending companies may review, verify and ask for explanations for certain pieces of data they deem a red flag.

Credit report information and time

Personal information like your name and address as well as positive financial information, like a responsible payment history, can remain on your credit reports indefinitely.

Credit bureaus compile negative information to illustrate how risky or unreliable a potential borrower or consumer may be. Most of these details can remain on credit reports for seven to ten years.

Credit Bureaus and Your Information

Credit bureaus do not make decisions with respect to whether a loan or credit card application gets approved. The credit reports they maintain are sold to lending institutions who rely on them to determine borrower creditworthiness. The information contained in your credit report is not only used by financial institutions to accept or decline applications, it can also be used to determine the interest rate and other financial terms. Landlords and business partners may vet credit reports during certain transactions, and a growing number of employers are reviewing credit reports during job application and employment review processes.

Credit Score

The information in your credit reports is used to generate three-digit credit scores, which are representations as your creditworthiness. Credit scores are essentially numerical evaluations of your credit history. Because there are three major credit-reporting agencies, and the information collected by them can be different, your credit scores may also vary depending on what bureau a lender is using to determine your credit worthiness. Each credit bureau has different versions of its own scoring algorithms. The intellectual property related to the scoring algorithms are private and have never been released by any of the 3 credit bureaus.

Reviewing your credit reports and monitoring your scores for any sudden changes is essential to recognizing identity theft and protecting yourself against the damage it can cause to your credit. Knowing your scores will help you understand what types of terms and conditions you may qualify for on any lines of credit or loans. And of course preparing your credit reports for life’s credit related transactions is crucial to enhancing the quality of your transactions (savings).

The Big Three

While there are dozens of credit bureaus in the U.S., the “Big Three” are Equifax, Experian and TransUnion.


Equifax was founded in Atlanta, GA, as Retail Credit Company in 1899. The company grew quickly and by 1920 had offices throughout the US and Canada. By the 1960s, Retail Credit Company was one of the nation’s largest credit bureaus, holding files on millions of American and Canadian citizens. Even though the company continued to do credit reporting, the majority of their business was making reports to insurance companies when people applied for new insurance policies including life, auto, fire and medical insurance. All of the major insurance companies used RCC to get information on health, habits, morals, use of vehicles and finances. They also investigated insurance claims and made employment reports when people were seeking new jobs. Most of the credit work was then being done by a subsidiary, Retailers Commercial Agency.

Retail Credit Company’s extensive information holdings, and its willingness to sell them to anyone, attracted criticism of the company in the 1960s and 1970s. These included that it collected “…facts, statistics, inaccuracies and rumors… about virtually every phase of a person’s life; his marital troubles, jobs, school history, childhood, sex life, and political activities.” The company was also alleged to reward its employees for collecting negative information on consumers.

As a result, when the company moved to computerize its records, which would lead to much wider availability of the personal information it held, the US Congress held hearings in 1970. These led to the enactment of the Fair Credit Reporting Act in the same year which gave consumers rights regarding information stored about them in corporate databanks. It is alleged that the hearings prompted the Retail Credit Company to change its name to Equifax in 1975 to improve its image.

The company later expanded into commercial credit reports on companies in the US, Canada and the UK, where it came into competition with companies such as Dun & Bradstreet and Experian. The insurance reporting was phased out. The company also had a division selling specialist credit information to the insurance industry but spun off this service, including the Comprehensive Loss Underwriting Exchange (CLUE) database as ChoicePoint in 1997. The company formerly offered digital certification services, which it sold to GeoTrust in September 2001. In the same year, Equifax spun off its payment services division, forming the publicly listed company Certegy, which subsequently acquired Fidelity National Information Services in 2006. Certegy effectively became a subsidiary of Fidelity National Financial as a result of this reverse acquisition merger.

In October 2010, Equifax acquired Anakam, an identity verification software company.

Equifax purchased eThority, a business intelligence (BI) company headquartered in Charleston, South Carolina in October 2011. eThority is partnering with TALX, a St. Louis-based business unit of Equifax, and will remain in Charleston.

Equifax Workforce Solutions is one of the 55 contractors hired by the United States Department of Health and Human Services to work on the web site.

In September 2017, Equifax announced a cyber-security breach, which it claims to have occurred between mid-May and July 2017. During this breach cybercriminals gained access to 145.5 million U.S. consumers’ personal data, including their Social Security numbers, full names, addresses, birth dates, and, in some cases driver’s license information and employment data. At least 209,000 consumers’ credit card credentials were taken in the attack.


Based in Dublin, Ireland, the company operates in 37 countries with headquarters in the United Kingdom, the United States, and Brazil. Aside from the credit services it offers, Experian also sells decision analytic and marketing assistance to businesses. Experian collects and aggregates information on over one billion people and businesses including 235 million individual US consumers and more than 25 million US businesses. Experian for much of its history was known as TRW Information Systems and Services Inc., a subsidiary of TRW Inc. In November 1996, TRW sold the unit, as Experian, to two Boston private equity firms: Bain Capital and Thomas H. Lee Partners. Just one month later, the two firms sold Experian to The Great Universal Stores Limited which was based in Manchester, England (later renamed GUS).

During the 1970s, The Great Universal Stores Limited, a retail conglomerate with millions of customers paying for goods on credit, had employed John Peace, a computer programmer at the time, to combine the mail order data from various of its subsidiaries and businesses to create a central database to which was later added electoral roll data as well as county court judgements. GUS’s database was commercialized in 1980 under the name Commercial Credit Nottingham (CCN). When The Great Universal Stores Limited acquired Experian in 1996, it was merged into CCN.

During the next ten years, Experian broadened its product range to new industry sectors, beyond financial services, and entered new markets such as Latin America, Asia Pacific and Eastern Europe. The business expanded through both organic development and acquisitions. In October 2006 Experian was demerged from the British company GUS and listed on the London Stock Exchange.

In August 2005, Experian accepted a settlement with the Federal Trade Commission (FTC) over charges that Experian had violated a previous settlement with the FTC. The FTC’s allegations concerned customers who signed up for the “free credit report” at Experian’s site. The FTC alleged that ads for the “free credit report” did not adequately disclose that Experian would automatically enroll customers in Experian’s $79.95 credit-monitoring program.

In January 2008, Experian announced that it would cut more than 200 jobs at its Nottingham office as it moved development work to India to reduce costs.

Experian shut down its Canadian operations on 14 April 2009.

In March 2017, Experian agreed to pay a $3 million fine related to giving credit scores to consumers that were not their true credit score. The Consumer Financial Protection Bureau was the United States federal agency who imposed the fine.[19]

Among its suite of services, Experian offers online access to credit history and products meant to protect from fraud and identity theft.


TransUnion collects and aggregates information on over one billion individual consumers in over thirty countries, including 200 million files profiling nearly every credit-active consumer in the United States. TransUnion was originally formed in 1968 as a holding company for the railroad leasing organization, Union Tank Car Company. The following year, it acquired the Credit Bureau of Cook County, which possessed and maintained 3.6 million card files. In 1981, a Chicago-based holding company The Marmon Group acquired TransUnion for approximately $688 million. Almost thirty years later, in 2010, Goldman Sachs Capital Partners and Advent International acquired it from Madison Dearborn Partners In 2014, TransUnion acquired Hank Asher’s data company TLO. On June 25, 2015, TransUnion became a publicly traded company for the first time, trading under the symbol TRU.

TransUnion has evolved its business over the years to offer products and services for both businesses and consumers. For businesses, TransUnion has evolved its traditional credit score offering to include trended data that helps predict consumer repayment and debt behavior. This product, referred to as CreditVision, launched in Oct. 2013.

Its SmartMove™ service facilitates credit and background checks for consumers who may be serving in a landlord capacity.

In September 2013, the company acquired eScan Data Systems of Austin to provide post-service eligibility determination support to hospitals and healthcare systems. The technology was integrated into TransUnion’s ClearIQ platform that tracks patients demographic and insurance related information to support benefit verification.

In November 2013, TransUnion acquired TLO LLC, a company that leverages data in support of its investigative and risk management tools. Its TLOxp technology aggregates data sets and using a proprietary algorithm to uncover relationships between data that were not possible before.

In 2014, a TransUnion analysis found that reporting rental payment information to credit bureaus can positively affect credit scores. To benefit consumers, they initiated a service called ResidentCredit, making it easy for property owners to report data about their tenants to TransUnion on a monthly basis. These reports include the amount each tenant pays, the timeliness of their last payment, and any remaining balance the tenant currently owes. As a result, companies have started reporting rent payment information to TransUnion, including YapStone, Inc., Pangea Real Estate, and RentReporters.

As part of its fraud protection products, it also offers business a tool called DecisionEdge that aggregates the data needed to prevent fraud through a system that customizes the information needed to finalize a transaction.

For consumers, TransUnion offers credit monitoring and identity theft protection tools. The company’s app offers a function called CreditLock that allows an individual to unlock and lock their credit to help protect against fraudulent activity.


In an effort to regulate credit bureaus and their use of consumer information, the Fair Credit Reporting Act was passed in 1970. The Fair Credit Reporting act was designed to protect consumers from intentional or negligent information in their credit score reports.

Federal law entitles you to one free credit report from each bureau every twelve months. If you need to get an additional credit report during the year, you can purchase one directly from each of the major credit bureaus.


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