What You Need to Know About the 3 Major Credit Bureaus
Harrison Pierce is a writer and a digital nomad, specializing in personal finance with a focus on credit cards. He is a graduate of the University of North Carolina at Chapel Hill with a major in sociology and is currently traveling the world.
At a Glance
Experian, TransUnion, and Equifax are the main credit bureaus in the U.S. These companies collect financial information about you that impacts your credit score. Whenever you apply for a loan or open a new credit card, the potential lender will review your profile at one or more of these agencies to determine whether you qualify. It’s essential to understand what information is being shared, who can access it, and how you can correct any errors should they arise. Building and maintaining good credit requires being responsible with payments, monitoring your credit report regularly, and understanding the process monitored by these three major bureaus.
In this article, you’ll learn:
714, 695, and 698
are the average credit scores for each credit bureau like Experian, TransUnion, and Equifax respectively.
What is a credit bureau?
A credit bureau is a company that collects and maintains information about individuals’ credit history and provides credit reports to lenders, creditors, and other authorized parties. Credit bureaus gather data from various sources, including credit card companies, banks, other financial institutions, public records, and collections agencies.
The information that credit bureaus collect typically includes an individual’s payment history, current and past credit accounts, outstanding debts, bankruptcies, foreclosures, and other financial information that can be used to assess their creditworthiness.
Lenders and creditors use the credit reports provided by credit bureaus to make decisions about whether to extend credit to an individual and on what terms, such as the interest rate and credit limit. The credit bureau’s reports and scores help lenders assess the risk of lending money and make more informed decisions about extending credit.
What does a credit bureau do?
A credit bureau primarily collects, organizes, and maintains information about individuals’ credit history and other financial information. Here are some of the key activities that a credit bureau typically undertakes:
- Collect and compile credit data: A credit bureau gathers information about individuals’ credit history and financial transactions from various sources, including banks, credit card companies, lenders, and other financial institutions
- Maintain credit reports: The credit bureau then creates a credit report for each individual, summarizing their credit history and other financial information.
- Calculate credit scores: The credit bureau uses the information in the credit report to calculate a credit score, a numerical representation of an individual’s creditworthiness.
- Provide credit reports and scores to lenders: Credit bureaus provide credit reports and scores to lenders, creditors, and other authorized parties who use this information to make decisions about extending credit to individuals.
- Investigate and correct errors: If an individual finds an error in their credit report, they can dispute it with the credit bureau, which is then responsible for investigating and correcting the error if it is found to be inaccurate.
The top 3 credit bureaus
There are three main credit bureaus in the U.S. that you should know about.
TransUnion is a global information and insights company that provides credit reporting and risk management services to businesses and consumers. The company gathers, analyzes, and processes data from various sources, including credit bureaus, public records, and alternative data sources, to help businesses make informed decisions about credit risk, fraud detection, and marketing strategies. TransUnion also offers consumer credit monitoring and identity theft protection services. It was founded in 1968 and is currently headquartered in Chicago, Illinois, and operates in more than 30 countries worldwide.
Equifax provides businesses and consumers with credit reporting, risk assessment, and identity verification services. They collect and aggregate data from various sources, including credit bureaus, public records, and alternative data sources, to help businesses assess creditworthiness, detect fraud, and manage risk. Equifax also provides consumers with credit monitoring and identity theft protection services, enabling them to stay informed about their credit scores and protect themselves from theft. Founded in 1899, Equifax is headquartered in Atlanta, Georgia, and operates in over 24 countries worldwide.
Experian is a global information services company that provides credit reporting, data analytics, and marketing services to businesses and consumers. They collect and analyze data from various sources, including credit bureaus, public records, and alternative data sources, to help businesses make informed decisions about credit risk, fraud prevention, and marketing strategies. Experian also offers consumer credit monitoring and identity theft protection services, enabling you to track your credit score and detect potential fraud. Additionally, Experian provides businesses with data management and marketing services, helping them to better understand their customers and improve their marketing efforts. Founded in 1996, Experian is headquartered in Dublin, Ireland, and operates in more than 45 countries worldwide.
Why does your credit score differ between credit bureaus?
Your credit score may differ between credit bureaus because each credit bureau uses its own proprietary algorithm to calculate your score based on the credit data it has collected about you. While the factors used to calculate your credit score are generally the same across all credit bureaus, the weight of each factor can vary.
Also, not all lenders report to all credit bureaus; some may report to only one or two. This can result in differences in the credit data that each bureau has about you, which can then affect your credit score.
Another reason your credit score may differ between credit bureaus is timing. Your credit score is based on the credit data available when the score is calculated. If one credit bureau receives updated credit data before another, that can result in differences in your credit score.
Other important credit bureaus
While Equifax, Experian, and TransUnion are the three major credit bureaus in the United States, other credit reporting agencies may also collect and provide credit data. Here are a few examples:
- Innovis: Innovis is a credit reporting agency that collects and provides credit data to lenders and other authorized parties. They focus on providing identity verification, fraud prevention, and risk management solutions.
- Clarity Services: Clarity Services is a credit bureau that provides credit data on subprime borrowers, such as those with a limited credit history or poor credit scores. They specialize in alternative credit data, such as rent and utility payments, to help assess creditworthiness.
- MicroBilt: MicroBilt is a credit bureau that provides credit data to businesses and individuals. They specialize in alternative credit data, such as payday loans and rent-to-own agreements, to help assess creditworthiness.
- SageStream: SageStream is a credit reporting agency that collects and provides credit data to lenders and other authorized parties. They focus on providing credit data for non-traditional credit accounts, such as rent, utilities, and insurance.
Credit rating agencies vs credit bureaus
Credit rating agencies and credit bureaus are two different types of organizations that provide different types of credit-related services.
Credit bureaus collect and maintain credit data on individuals and businesses, which they use to create credit reports and scores. These reports and scores are used by lenders, creditors, and other authorized parties to assess an individual’s creditworthiness and make decisions about extending credit. Credit bureaus do not provide ratings on securities or other financial instruments.
Credit rating agencies, like Standard & Poor’s, Moody’s, and Fitch, provide credit ratings on securities and other financial instruments issued by corporations, governments, and other entities. These ratings are intended to provide an assessment of the creditworthiness of the issuer and the likelihood of default. Credit rating agencies use their own methodologies to assess credit risk and assign ratings, which are widely used by investors, lenders, and other financial market participants to make investment and credit decisions.
There is no one “best” credit bureau among Equifax, Experian, and TransUnion, as each credit bureau has its own strengths and weaknesses. Each collects and maintains credit data on individuals and businesses and uses that data to create credit reports and credit scores. However, each bureau’s credit data and methodology can differ, resulting in differences in the credit reports and scores they provide.
All three major credit bureaus strive to maintain accurate and up-to-date credit reports. However, since the credit reports are based on the credit data each bureau has collected, there may be some differences in the information each bureau has on file. Also, each bureau may use slightly different scoring models to calculate credit scores, which can also result in differences in the credit scores provided by each bureau.
The accuracy of a credit report depends on the accuracy of the credit data that is provided to the bureau, as well as the bureau’s ability to process and maintain that data. If you find errors or inaccuracies on your credit report, you can dispute them with the credit bureau to have them corrected. You can also request that the bureau notify other bureaus of any corrections.
Here is the contact info for Equifax, Experian, and TransUnion:
- Equifax: 1-800-685-1111
- Experian: 1-888-397-3742
- TransUnion: 1-800-916-8800
- Equifax: www.equifax.com
- Experian: www.experian.com
- TransUnion: www.transunion.com
- Equifax: Equifax Information Services LLC, P.O. Box 740241, Atlanta, GA 30374-0241
- Experian: P.O. Box 4500, Allen, TX 75013
- TransUnion: TransUnion LLC, Consumer Disclosure Center, P.O. Box 2000, Chester, PA 19016