When you apply for a loan or a credit card, the lending agency needs to know whether or not you are a good credit risk. To determine that, they will get a copy of your credit report and credit score. But where do these come from? They come from credit bureaus. How many credit bureaus are there? How do they work? For the answers to these and other questions about credit bureaus, read on.
There are three major U.S. credit bureaus that you need to worry about when it comes to credit reporting. When a potential lender is considering giving you a loan, it is one of these credit reporting agencies (CRAs) that they will consult. The three major bureaus are Experian, Equifax and TransUnion.
Up until about 15 years ago, the third major credit bureau of the trio including Equifax and TransUnion was called TRW. However in 1996, Experian, a credit information company headquartered in Ireland, acquired TRW and took over their credit reporting duties. Experian is regulated by the Fair Credit Reporting Act (FCRA). It has databases containing consumer credit information on over 200 million Americans and 400 million vehicles.
Equifax, has been in operations for over 100 years. Originating as the Retail Credit Company in 1899 it is the oldest of the three major credit bureaus. In addition to providing credit reporting information, Equifax sells a variety of credit-related services.
TransUnion is the smallest of the three major credit bureaus, but still a trusted credit information source. Created in 1968, TransUnion amalgamated various major city credit bureaus to grow into the credit reporting power they are today.
You can get certain credit information from these bureaus, but you won’t get any other credit services, at least not without paying for them. What you can do is order credit monitoring. This will get you a copy of your credit report along with online access to your report. Email alerts notify you of any major activity on your credit report, how it affects your credit score and gives you the ability to spot potential identity theft or fraud.
If you examine your credit report and see something that doesn’t look right, notify the credit bureau immediately. Whether its identity theft or a simple reporting mistake, get it straightened out quickly before it affects your score or your credit reputation. A good credit rating is your key to increased borrowing power and financial freedom.