Credit Reporting Agencies: Credit Bureaus in the U.S.

Credit reporting agencies, also called credit bureaus, provide an important service for creditors and consumers alike. They collect and maintain information about an individual’s dealings with past and current credit accounts.

Understanding how credit reporting agencies work and how to access your credit history can help you build and maintain a good credit score, prevent identity theft, and more.

What Is a Credit Bureau?

The three main credit bureau reporting companies do two things: gather information about consumer credit information and history as reported by their creditors and provide those reports to prospective lenders when you apply for credit.

The information found in your credit report can help a lender determine your creditworthiness. This gives them the information they need to decide whether to extend credit to you and at what cost in the form of interest and fees.

While these credit report companies don’t generate the credit scores used by lenders, credit score agencies like FICO use the information found in your credit reports to calculate your credit score. Another factor creditors use in lending decisions. This figure ranges from 300 to 850 – the higher, the better.

Consumers often ask which credit bureau is most important. There’s no right or wrong answer to this question – it ultimately depends on which credit reporting agency the lender or creditor you’re applying with uses to make lending decisions.

How Do Credit Bureaus Work?

Credit bureaus maintain a massive database of credit reports for hundreds of millions of Americans. Using personal information like your Social Security number and date of birth, the credit reporting agencies work with creditors, who report information about your credit accounts, which the credit bureaus use to create your credit report.

For example, if you get a free copy of your credit report from the three credit bureaus — Experian, TransUnion and Equifax — which you can request every 12 months through AnnualCreditReport.com — you’ll typically be able to see all of your open credit accounts, as well as some accounts you’ve closed, along with information about your balances, payments and more.

When you apply for credit, the creditor typically requests a copy of your credit report from one or more of the credit bureaus, along with your credit score that’s based on your report, to determine your creditworthiness.

How Are Credit Bureaus Regulated?

The three nationwide credit bureaus are private companies, but they’re regulated by the Fair Credit Reporting Act (FCRA), ensuring fair and accurate reporting. The Consumer Financial Protection Bureau (CFPB) supervises the credit bureaus to ensure they are functioning effectively and fairly.

What Services do Credit Bureaus Offer?

In addition to the credit reporting process, credit bureaus also offer various services to both consumers and businesses. For example, consumers can sign up for credit reporting services — Experian’s is free, but Equifax and TransUnion charge a subscription fee — and identity theft protection services, which are generally paid.

Equifax also offers credit reporting services for small businesses and corporations and information verification services for creditors, employers, and government agencies.

What Are the 3 Major Credit Reporting Agencies?

The three national credit bureaus are Experian, Equifax, and TransUnion. Here’s what to know about each.

Experian

Experian is a multinational company based in Dublin, Ireland. Its U.S. division, however, is headquartered in Costa Mesa, California. The agency was officially founded in 1996.

One of the bureau’s notable services is Experian Boost, which allows consumers to add eligible, on-time payments to utility companies, phone providers, and streaming services and rent to their Experian credit reports to potentially increase their FICO credit score.

Equifax

Equifax is also a multinational company based in the U.S., with headquarters in Atlanta, Georgia. The company was founded in 1899 as a retail credit company. While it does offer some consumer-facing products, its services outside of credit reporting are more geared toward commercial and government needs.

Equifax notably suffered a massive data breach in 2017, which impacted more than 140 million Americans.

TransUnion

TransUnion was founded in 1968 as a holding company for a railroad leasing organization, but the following year, it acquired the Credit Bureau of Cook County, which paved the way for its current position as one of the three largest national credit reporting agencies in the U.S.

While it’s headquartered in Chicago, Illinois, TransUnion offers services in dozens of countries.

What Are the Differences Between the Credit Agencies?

While each of the three national credit bureaus offers credit reporting and monitoring services to both creditors and consumers, their actual services can differ. For example, Experian offers consumers free access to their credit reports with the bureau, as well as their FICO credit score, which most U.S.-based creditors use in their lending decisions.

However, the other two charge for their credit monitoring services, and TransUnion doesn’t offer a FICO score at all. Instead, it provides the VantageScore credit score, which was developed in a joint venture of all three credit bureaus.

They also offer varying products and services outside of credit reporting for consumers, businesses, and government agencies.

How Can You Get Your Credit Scores from All 3 Credit Bureaus?

You can get your credit scores from each bureau directly from the bureau, with Experian’s basic credit monitoring service being free and the others paid. Alternatively, you can get free access to your credit score through some financial institutions like credit card companies, banks, and credit unions.

You’ll also get your credit score from one or more of the three credit bureaus when you apply for credit and get denied — creditors are required by law to provide this information, along with the reasons for the denial.

Do the Credit Bureaus Offer Services to Help Build Your Credit?

Experian features these tools to help you build your credit if you’re just starting or level up your credit health:

• ExperianGo: This tool makes it easier to build credit from scratch. To get started, download the Experian app and sign up for a free Experian membership. You’ll receive tailored recommendations on the best ways to start building credit from scratch, along with resources to educate you on effective credit management and habit-building while you wait for your FICO Score to be established.
• Experian Boost: You can have bills made to eligible service providers and select landlords added to your Experian payment history to raise your credit score instantly. Experian Boost is a free service, and the average user sees an increase of 13 points in their FICO Score 8 – one of several credit scoring models – from Experian.

Both of these tools are included with the CreditWorks Basic membership that gives you access to Experian credit report monitoring, monthly Experian credit report and FICO score updates, FICO score tracking, and FICO Score alerts. Even better, it’s free to sign up, and you won’t have to put a credit card on file to get started.

You also have the option to upgrade your account to a paid membership to get identity theft protection and insurance, three-bureau reports and scores, Experian CreditLock, access to the FICO Score Simulator and view industry-specific FICO scores.

FAQs About Credit Reporting Agencies