The Three Credit Bureaus: Why They’re Important

Experian, TransUnion and Equifax are the three major credit bureaus in the United States. Credit bureaus are private companies that compile data for your credit report.

Because your credit report gives information to potential lenders and can impact whether you’re approved for a loan or a credit card, it’s crucial to know how credit bureaus operate.

In this guide, we’ll break down what the credit bureaus do, how they score you and other important information.

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What Does a Credit Bureau Do?

Credit bureaus compile data about your credit history to form a credit report. The information on your credit reports includes personal data like your name, mailing address and a list of your employers, as well as credit accounts like loans and credit cards.

When a lender evaluates you, they go to one of the three main credit bureaus for a report. Any potential lender or employer can only receive your credit report with your permission. Your credit report won’t include information like your age, race, or marital status.

What You Should Know About Each Credit Bureau

The three major credit bureaus are Equifax, TransUnion and Experian. As private companies, they each have their own way of collecting credit history data from a variety of sources. Here’s what to know about each credit bureau:

• TransUnion: Starting in 1968, TransUnion acquired and then expanded its library of credit files. By 1988, they had an active credit profile for almost every consumer in the country. Now operating in 33 countries, TransUnion offers CreditCompass recommendations which help you point your score in the right direction. They also provide Credit Lock services to protect your report from criminals.

• Equifax: Formed in 1899, Equifax began as a group of tailors from Great Britain who swapped information about consumers that didn’t pay their debts. In 1965, it became a publicly held corporation. Equifax offers credit report monitoring, social security number scanning, and discounted family plans.

• Experian: Founded in 1826, Experian is the oldest credit bureau. Experian now operates in 37 countries. They provide special services like Experian BoostTM and identity theft monitoring.

How Do Credit Bureaus Get Your Information?

The three main credit bureaus—Experian, Equifax, and TransUnion—have access to the credit history of millions of people. They obtain this information from banks, loan companies, retailers and other lenders. The companies that report information are known as data furnishers.

Credit reporting is voluntary and not all companies do it. Those that report might do so at different times of the month, and some only report if you’ve missed a payment. Some companies report only to one or two of the three credit bureaus.