There are 3 major consumer credit bureaus: Equifax, Experian, and TransUnion. These organizations collect and store your personal financial information that is then used to generate credit reports and credit scores. This information can be used by third parties, such as creditors and lenders, to help them make lending decisions.
Read on to learn everything you need to know about the 3 major credit bureaus, including what information they collect, how they get the data, how your credit reports and credit scores are shared with third parties, and how to contact them if something on your report seems wrong or suspicious.
The three major credit bureaus
While there are many smaller credit bureaus — including agencies that collect data for both businesses and consumers — the three major consumer credit bureaus are Experian, Equifax and TransUnion.
Also known as credit reporting agencies, these organizations collect, store, and sell your credit information. If you have a credit card or loan, you likely have a credit file with one or all three of these major credit bureaus. Credit bureaus are able to collect your information without your consent, but if a third-party institution (e.g., a bank, mortgage lender) wants to look at your credit report, they must have a legitimate reason.
For example, when you apply for a credit card, you are essentially giving the financial institution consent to access your credit file to help them make the decision on whether they will deny or approve your request for a credit card.
Though many people may think every credit bureau is essentially the same, they are separate organizations that compete for the business of third parties. In fact, your credit report and score from one credit bureau may be slightly different from another because they collect data from different sources and use different formulas to calculate your credit score.
Information collected by credit bureaus
Credit bureaus create credit reports with your personal identifying information, including your name, birthdate, addresses (current and past), and Social Security number. Other information within your report may include:
- List of past and current credit accounts, such as loans, mortgages, and credit cards
- Payment history, including whether your payments were made on time
- Bankruptcies, collections, foreclosures and repossessions from the past 7 years
- Employment history
- Record of previous requests for credit report access, such as when your mortgage lender pulls your report
In order to protect your privacy, credit bureaus are regulated by the Fair Credit Reporting Act (FCRA), which puts strict rules on how the bureaus collect and share your personal financial data.
How credit bureaus get your information
Credit bureaus use various sources to collect your financial information, including:
Creditors report information. Banks, credit card issuers, and other creditors and lenders — known as “data furnishers” — often report information about their customers, including your payment history, to the credit bureaus. This isn’t required, but most share this data because it is beneficial for them when they need to make lending decisions.
Public records. In some cases, credit bureaus buy public records that contain information about bankruptcy filings, foreclosures, repossessions, and tax liens.
Data sharing. Although credit bureaus are competitors, they sometimes share information. For example, if you place a fraud alert when you suspect you’re a victim of identity theft, the credit bureau you reported it to may share this alert with the others.
How credit bureau data is used
The financial information credit bureaus collect is used for several different reasons, including:
- Calculating your credit score
- Assist creditors and lenders with lending decisions (approve or deny your request)
- Set insurance premiums and loan interest rates
- Evaluate your ability to pay rent after you fill in a lease application
- Pre-employment background checks to gauge your trustworthiness with money if you are being considered for a role that handles finances or purchasing decisions
- Determine if you need to pay a utility deposit when you’re moving into a new home
Why is a credit score important?
Your credit score plays a major role in your financial health. The number reflects your history of paying debts and gives creditors and lenders an idea of how you manage your finances. Beyond getting approved for loans and credit cards, your credit score can impact:
- Insurance premiums
- Interest rates on loans
- Where you live — landlords and mortgage lenders check your credit report/score
- Whether you need to make a deposit on utilities
- Cell phone plan prices
- Access to credit cards with rewards (e.g., cash back, travel points)
In short: your credit score can have a significant impact on many areas of your life.
What is a good credit score?
There are many different credit scoring models, but the FICO score model is most commonly used in the United States. FICO ranges scores between 300-850, and scores are put into categories:
- Exceptional: 800 or higher
- Very good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 579 and under
Lenders generally set their own standards on what they consider to be “good credit,” but most consider a credit score of 700 or higher as good. They use your score to determine whether to give you credit, how much, and what interest rate.
In general, the higher your credit score, the more likely it is you can use your score to your benefit.
How to raise your credit score
You can think of your credit score as a financial tool — the actions you take can help or hurt your ability to purchase the things you want and need. If your credit score is low, there are things you can do to improve it:
- Pay your bills on time
- Keep your credit card balances below your credit limits
- Keep your credit accounts open, even if you’ve paid them off
- Avoid applying for several credit cards at a time
- Monitor your credit reports regularly
- Dispute any inaccuracies on your credit report
Why credit scores vary among bureaus
When you check your credit reports and scores, you may notice that they vary from bureau to bureau. Your credit score likely won’t be much different among the bureaus because they all calculate your score based on how much credit you’re using, new credit accounts, payment history and the length of your credit history. Still, you may notice your credit score is a little higher with Experian, for example, than it is with Equifax.
There are a few reasons why credit scores vary amongst the three major bureaus, including:
- Reporting differences. Creditors and lenders aren’t required to report information to credit bureaus. In some cases, they may report to one but not the other two.
- Collection differences. One credit report may collect more information than the other two. For example, Equifax reports on more accounts and longer credit history than TransUnion.
- Different scoring models. Credit bureaus use slightly different scoring models to evaluate your credit report and generate credit scores.
It is your right — and is strongly recommended — to review your credit reports from all 3 major credit bureaus regularly. This allows you to make sure all the information on your report is correct and dispute any inaccuracies.
How to check your credit reports
It’s important to check your credit reports periodically to ensure your financial and personal information is accurate. This is a good way to make sure nobody has opened fraudulent accounts in your name and ensure everything on your report is up-to-date.
You’re legally entitled to free credit reports once a year from all three major credit bureaus. AnnualCreditReport.com provides a free annual credit report from Equifax, Experian and TransUnion. You can request the reports from the 3 major bureaus all at once or one at a time. You can do this in a few different ways:
Online: Visit AnnualCreditReport.com
Phone: 1-877-322-8228
Mail: Print and complete the Annual Credit Report Request Form and mail it to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
If you have been denied credit, a loan, housing, or a job because of information on your credit report, you can ask for the name, address, and telephone number of the agency that generated the credit report. You have the right to request a free report within 60 days of the denial, regardless of the date of your most recent free annual report.
Information to look at on your credit report
As you read through your credit reports, you’ll want to take a thorough look through each one to check for any errors. Details you’ll want to review include:
- Identification. Check the spelling of your name and your birth date, and make sure your current address is correct.
- Duplication. Each of your debts should be listed only once. If a credit card or loan is listed twice, you’ll want to dispute the error.
- Balance. Check the balance owing and your credit limit to ensure they are correct.
- Account status. Sometimes accounts that have been closed (e.g., car loan that has been paid off) may still appear to be open on your credit report.
How to dispute inaccurate information on credit reports
If you spot anything incorrect on your credit reports, you can dispute the inaccuracy. Under the Fair Credit Reporting Act, the credit bureau and the company that provided the information (e.g., banks) are required to conduct a free investigation to verify the information and correct any mistakes.
Each credit bureau has its own procedure for disputes, so contact all three to ensure the mistake is corrected for each bureau.
- For Experian disputes, visit: Experian disputes
- For Equifax disputes, visit: Equifax disputes
- For TransUnion disputes, visit: TransUnion disputes
Credit report disputes can be made over the phone, by electronic mail or by letter mail. E-mail and letters are the best way to ensure you have a paper trail and a record of your request(s).
