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What Is a Credit Bureau? Examining the Big 3 Credit Bureaus

Examining Credit Bureaus & the Big 3
Jason Steele
Jason SteeleUpdated October 29, 2022
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Credit bureaus are companies that gather and compile information about your everyday financial transactions. They then sell that data to lenders, landlords, employers, and others who are trying to decide whether or not to give you a loan, credit card, other financial product, lease, or job.There are many consumer credit reporting companies, but the biggest and most influential are TransUnion®, Equifax®, and Experian®. Here’s a closer look at the “big three” bureaus, how they get their information, and why they are so important to your financial life.

What Is a Credit Bureau?

Credit bureaus, also known as credit reporting agencies, are companies that gather and maintain data on consumers' credit use. They use this data to create credit reports, which are then used to create credit scores. Credit scores are issued as three-digit numbers (typically between 300 and 850) and can have a significant impact on whether you can qualify for a credit card or loan, as well as the interest rate you will pay. Credit scores can also impact your ability to rent a home, get a job, or secure an insurance policy. Credit bureaus don’t actually make lending decisions, however. Their main objective is to gather information about you. Recommended: What is a Good Credit Score? 

How Credit Bureaus Work

Credit bureaus get information mostly from other companies, which are referred to as data furnishers. Data furnishers are the financial institutions you interact with, such as banks, credit unions, credit card issuers, lenders, and collection agencies. Data furnishers send information about their customers’ accounts, such as current balances and payment history, to the credit bureaus. Although they aren’t required to report to the credit bureaus, creditors benefit from reporting because borrowers may be more likely to make payments on time if they know a late payment could negatively impact their credit scores.  Credit bureaus will also check public records to see whether you’ve had any foreclosures, bankruptcies, or other types of collection accounts. However, some types of public records, such as tax liens and civil judgments, are no longer allowed to be collected by credit bureaus. Bureaus also won’t add information related to your race, income, religion, political preference, or criminal record. 

The Top Three Credit Bureaus

While there are dozens of consumer-reporting companies across the U.S., these are the three that dominate the market for collecting, analyzing, and disbursing information about consumers in the credit markets:

Equifax

Equifax is based in Atlanta but operates or has investments in 24 countries across the globe. In the U.S., it’s particularly dominant in the South and Midwest.  

Experian

Experian has its domestic headquarters in Costa Mesa, California, and its corporate headquarters in Ireland. The company also has operational headquarters in the U.K. and Brazil. Experian originally handled reports for the Western United States. 

Transunion

Transunion is based in Chicago but has regional offices in Hong Kong, India, Canada, South Africa, Colombia, the U.K., and Brazil. 

What Information the Credit Bureaus Collect and How They Get It

Equifax, Experian, and TransUnion each keep a credit report on you that highlights key information about your everyday financial activity. They get their information from the creditors you do business with, such as your bank, credit card issuer, and loan servicers. For example, each month (typically on your statement closing date), your credit card issuer reports your balance to one or more of the credit bureaus. This results in an update of your credit score. If you apply for a new credit card or loan, the lender will likely alert one or more of these agencies. That information will then appear in your report and could affect your scores.

How Do the Credit Bureaus Make Use of Your Information?

Your financial information goes into a credit report that serves as the basis of your credit score. To create your credit score, the bureaus use an algorithm called a scoring model. The two main scoring models are FICO® and VantageScore®, but there are numerous versions under each of these main types. Credit bureaus then add your credit score to the other information they’ve compiled about you to create a comprehensive credit report that is given by request (for a fee) to credit issuers. 

How Credit Bureaus Are Regulated

Credit card bureaus are regulated under the Fair Credit Reporting Act (FCRA). The intention of FCRA, which has been amended many times over the years, is to protect consumers from negligent or fraudulent information in their credit reports. Towards that end, FCRA limits how the credit bureaus can collect, disperse, and disclose information. Some of its rules include:
  • A person or company must have a "permissible purpose" to request a copy of a consumer's credit report. 
  • Negative information, such as late payments, generally must be removed from credit reports after seven years, although certain bankruptcies can remain for 10 years.
  • Consumers have the right to dispute information in their credit reports. The credit bureau must investigate non-frivolous disputes and verify, correct, or delete the disputed information.
  • Consumers can request a free copy of their credit report from each credit bureau once every 12 months. (Due to the hardships caused by the COVID-19 pandemic, however, the credit bureaus are allowing people to get free credit reports weekly through December 2023.)

Credit Bureaus vs. Credit Rating Agencies

Though the names sound similar, credit bureaus are different from credit rating agencies. Credit rating agencies deal with companies and corporations; credit bureaus only focus on consumers. Credit ratings provide investors with information that helps them determine whether issuers of bonds, other debt instruments, and fixed-income securities will be able to meet their obligations. Credit rating agencies also provide information about countries' sovereign debt by analyzing the general creditworthiness of a country or foreign government. There are three major credit rating agencies: Fitch Ratings, Moody’s, and S&P Global. They assign countries and companies debt letter grades, such as AAA or CCC. However, each agency has a different rating system. 

What Appears on Your Credit Report?

Credit reports generally contain personal information, such as your name, address, birth date, and social security number. They also include your current and former employers, as well as information about your everyday financial activities, including:
  • Credit card balances
  • Loan balances
  • History of payments on credit cards and loans
  • Number and type of accounts
  • Bankruptcy filings
While credit bureaus typically focus on credit accounts, some also access more comprehensive information, including payment history on cell phone bills, utility bills, rent, and more.If you are an authorized user on someone else’s credit card, information on the balances and credit limits may be reflected on your credit report. If the card's been managed responsibly, meaning no missed payments or high levels of debt, an authorized user account has the potential to improve your credit profile.Recommended: Credit Card Terms Explained 

Who Uses Credit Reports?

The same creditors that send information to the credit bureaus also often purchase credit reports and credit scores from the bureaus.Legally, credit bureaus can provide your information to:
  • Lenders
  • Employers
  • Volunteer groups
  • Government agencies
  • Landlords
  • Banks
  • Credit unions
  • Payment processors
  • Retail stores
  • Debt buyers and collectors
  • Insurance companies
  • Telecommunications and utility providers
  • Casinos that extend credit or take checks

Why Credit Scores From the Major Credit Bureaus Differ

The credit bureaus each collect and store information in their own way, which can lead to slight differences in credit scores. What’s more, lenders and collection agencies may not report to all three credit bureaus. As a result, one credit bureau may have the transaction history from that lender or collection agency, while the other bureaus don’t. This could result in different information impacting your credit score. Credit scores can also differ due to different scoring models. There are many different scoring models used by bureaus and these can result in different calculated credit scores. 

Do You Need All Three Credit Scores?

It can be a good idea to check all three of your credit reports, since credit information is not always reported uniformly across all three bureaus. You can get all three reports for free by visiting AnnualCreditReport.com.Checking your credit reports at least once a year can help you see where your credit stands, spot problems that could suggest identity theft or fraud, and take measures to improve your credit scoreKeep in mind, however, that your free credit reports typically do not contain any credit scores. However, you may be able to get your score for free by checking your credit card, bank, or loan statement (or accessing your online account). You can also purchase credit scores directly from one of the three major credit bureaus or other providers, such as FICO. Another option is to use a credit monitoring service, which typically involves a monthly subscription fee.

Disputing Errors on Your Credit Report

If you find an error on your credit report, it’s a good idea to try to fix it as soon as possible. All of the credit reporting bureaus allow you to dispute errors on your credit report. To dispute an error, you will generally need to explain in writing what you think is wrong, include the credit bureau’s dispute form (if they have one), copies of documents that support your dispute, and keep records of everything you send. If you send your dispute by mail, you can use the address found on your credit report or a credit bureau’s address for disputes.You can find more information on how to dispute an error on each credit bureau’s website:

The Takeaway

The three biggest credit reporting agencies are TransUnion, Equifax, and Experian. Because they have slightly different reporting methods, it is common to have different credit scores across all three bureaus.It can be a good idea to check your credit reports at least annually for a general credit “checkup” and to make sure there are errors or signs of credit card fraud or identity theft. You may also want to check your reports to get a sense of your credit health before making a financial move, like applying for a loan or a new credit card.If you're currently in the market for a new credit card, Lantern by SoFi can help. With our online credit card marketplace, it’s easy to compare multiple credit card offers (including “credit-building” cards) matched to your needs and qualifications all in one place and without making any type of commitment.
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Frequently Asked Questions

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About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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