Takeaways
- The three main U.S. credit bureaus are Equifax, Experian, and TransUnion.
- FICO and VantageScore use credit reports to make credit scores.
- Each credit bureau collects different information about consumers.
- Not all credit bureaus receive the same information from lenders.
- Credit bureaus create credit reports on consumers, which they sell to lenders.
What Is a Credit Bureau?
A credit bureau is a company that collects information about consumer behavior, packages that data into a credit report, and sells that information to credit-scoring companies. This helps lenders determine a consumer’s creditworthiness and whether they should lend the consumer capital.
Credit bureaus are regulated by the Fair Credit Reporting Act (FCRA) regarding how they collect, share, and send consumer information. Different financial institutions, such as banks, lenders, landlords, and other finance companies, send consumer data to credit bureaus. This information is analyzed, synthesized, and packaged as a credit report, which is then used to create credit scores and help lenders determine loan eligibility.
Credit-scoring companies, like FICO and VantageScore, use credit reports to create credit scores. Credit scores are three-digit numbers ranging from 300 to 850, assessing your ability to repay debt. You are assigned a number based on the information in your credit report and proprietary mathematical formulas used by credit-scoring companies.
Your credit report and score help lenders determine your eligibility for various credit products, such as personal loans and credit cards. They also affect the rewards programs and terms you qualify for.
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Who Are the Three Major Credit Bureaus?
There are many credit bureaus that traffic in broader and niche industry-specific credit reports and data collection. However, the three main credit bureaus are Equifax, Experian, and TransUnion. Below is a brief description of each bureau.
1. Equifax: Founded in 1899, Equifax is a global data, analytics, and technology company. Equifax is a publicly traded company listed on the New York Stock Exchange (Ticker: EFX) and has over 14,000 employees in 24 companies.[1]
2. Experian: Founded in 1996, Experian is a global information services company. It is publicly traded and listed on the London Stock Exchange (Ticker: EXPN) and has over 21,700 employees in 30 companies serving clients in over 100 countries.[2]
3. TransUnion: Founded in 1968, TransUnion is a global information and insights company. It is a publicly traded company listed on the New York Stock Exchange (Ticker: TRU), has over 12,000 employees, and operates in more than 30 countries.[3, 4]
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Why Credit Reports Matter
Credit reports are the foundational data that determines your credit score. Your credit score matters because lenders, insurers, and employers will obtain your credit report to assess your level of financial responsibility.[5] Here are some practical examples of when your credit report will be used.
- Credit Card Applications: Lenders will pull your credit report to see what credit cards and benefits you qualify for based on your financial history. Credit reports can determine whether you get better credit card terms and interest rates.
- Apartment Applications: Landlords can use your credit report to see your payment history. A good credit report may help you get a better apartment.
- Job Applications: Employers can use your credit report to decide whether to hire you. If you give a prospective employer permission, they can use the credit report to make a hiring decision, and it could boost your application ahead of the competition.
- Car Insurance: Your credit report partly determines your insurance rates. Insurance companies use your credit report to determine whether and at what rate they will extend coverage to you. Cleaner credit reports typically command lower rates and better coverage.
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How Do Credit Bureaus Collect Information?
Equifax, Experian, and TransUnion collect standard information on consumers: name, dates of birth, address, and social security number. They also source credit information like credit history, which contains data such as loans, payment history, and credit applications.
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Free Credit Report
You can request a free credit report from all three major credit bureaus at least once a year from AnnualCreditReport.com. You can dispute that data if you notice incomplete information or errors in your report. The credit bureaus are legally required to investigate and resolve the matter.
Read More: 7 Easy Steps to Get Your Free Credit Score
What if Your Credit Report is Wrong?
Information is not sent to all three credit bureaus simultaneously or from the same lenders. Because of this lack of standardization in reporting, credit bureaus will build consumer credit reports with different information.
Sometimes, inaccurate or incomplete information will be in your credit report. You can contact the credit bureaus to correct this information. That is why you should monitor your credit report at least annually.
Related: 5 Easy Steps to Rebuild Your Credit
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What Is a Credit Score?
A credit score is a number between 300 and 850 assigned to you based on your predicted ability to repay a lender for a new loan. Lenders use credit scores to assess the likelihood of you repaying them on time and in full. Companies issuing new credit cards, mortgages, car loans, and other consumer debt products rely on your credit score.
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Smart Summary
Credit bureaus play an integral part in your ability to obtain financing. The three major credit bureaus collect valuable consumer data, which helps financial institutions determine lending decisions. An accurate credit report is critical whether you want a traditional installment loan such as a mortgage, personal loan, auto loan, or a revolving debt facility like credit cards. Checking your credit report at least annually, or before applying for a major loan application, is a smart money decision.
(1) Equifax. Who We Are. Last Accessed February 16, 2025.
(2) Experian. About Experian. Last Accessed February 16, 2025.
(3) TransUnion. About Us. Last Accessed February 16, 2025.
(4) TransUnion. Transunion announces earnings release date for second quarter 2023 results. Last Accessed February 16, 2025.
(5) Federal Reserve. Credit Reports and Credit Scores. Last Accessed February 16, 2025.
