The 3 Credit Bureaus Explained

Written by

Luke Daugherty

Luke Daugherty

Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.

Last Update on Nov 29, 2023

Credit bureaus play a critical role in the world of consumer credit. These bureaus, also known as credit reporting agencies, collect important personal and financial information about consumers and sell it to creditors, who use it to make decisions about loan and credit applications.

Although there are many credit reporting agencies, three in particular play a larger role than the rest: Equifax, Experian, and TransUnion. When you apply for most types of credit, your lender will usually check your credit history with one or all of these bureaus.

Given their place in the credit ecosystem, the three major credit bureaus can have a significant impact on your borrowing abilities. Read on to learn more about what these agencies do, how they differ, and why they matter to you as a consumer.

What Are The 3 Main Credit Bureaus?

The three major credit bureaus loom large in the landscape of consumer finance. Each collects your personal information from lenders and collates it in the form of a credit report, which it then sells to creditors when you apply for loans.

Here is an overview of each bureau in alphabetical order:

• Equifax: Equifax was founded in 1899 and is headquartered in Atlanta. It employs 14,000 people in 24 different countries and generated $5.1 billion in revenue in 2022, making it the second-largest credit bureau.
• Experian: Experian has its North American headquarters in Costa Mesa, California, and was founded in 1996. With around 21,700 employees in 30 countries and more than $6.6 billion in revenue in 2022, it’s the largest of the three credit bureaus.
• TransUnion: TransUnion was founded in 1968 and is based in Chicago. The company employs more than 7,500 people in 30 countries and reported more than $3.7 billion in revenue in 2022.

Comparing The 3 Bureaus

Although there are some minor differences among the three bureaus, they all collect and report your personal information in similar ways. That includes your name, address, Social Security number, and birthday, as well as information about your loan applications, open accounts, balances, payment history, delinquencies, and more. 

Where differences occur, it typically comes down to individual creditors. For instance, one credit card company may report your account information to two of the three bureaus. Also, lenders have different timelines for reporting late payments, and each bureau operates on its own reporting cycle, so information may show up in different reports at different times.

The credit bureaus themselves do not usually provide credit scores with credit reports they send out. Scores are an interpretation of what’s in your report, and lenders use different models — FICO and VantageScore are the most popular — to score the information in your credit report. Your scores can vary based on the model used and any differences in information provided by the three different bureaus.

How Credit Bureaus Impact Lending Decisions

Anytime you apply for a loan or credit card of any kind, the lender will pull your credit report from one or all of the three major bureaus. The company will then assess your report based on a FICO or VantageScore model or its own in-house method. Although the key items vary based on the model, all put special weight on our payment history and the amount of revolving credit (e.g., credit cards) you’re using compared to your credit limit. Age of credit, the number and type of account, and recent credit inquiries also play a role.

Lenders may have additional criteria for determining whether you qualify for a loan and what terms to offer you. Mortgage lenders, for instance, will often compare the total of your monthly payments with your monthly income to determine your debt-to-income (DTI) ratio.

Whatever the specific method used, the important thing to know is that the information provided by the credit bureaus plays a significant role in determining whether you can borrow money. It also dictates how much you can borrow, how long you’ll have to pay it back, your interest rates, and more.

How To Get Your Credit Reports From The Credit Bureaus

Because your credit reports are so important for your financial well-being, it’s important to check them regularly for errors. Even small issues like an incorrect address or an account you didn’t open can impact your credit score or impede you from getting a loan.

By law, you’re entitled to one free copy of your credit report from each of the three bureaus each year. Until further notice, you can get a free online copy every week. Simply visit AnnualCreditReport.com and request your report online. Alternatively, you can call 1-877-322-8228 or print the form and mail it to: 

• Annual Credit Report Request Service
• P.O. Box 105281
• Atlanta, GA 30348-5281

Note that you’ll need to file one request for each bureau. You can do this all at once or file at different times. If you see an error in any of your reports, you should contact the credit bureau immediately. If there are serious signs of trouble, such as identity theft, you can even request a credit freeze to prevent further activity while you investigate.

Go Beyond Credit Reports With Credit Monitoring Services

As important as it is to keep tabs on the information in your credit reports, it’s equally crucial to keep track of your credit scores. Credit monitoring services can help you do both, providing quick updates when something changes in your credit history or your score goes up or down. 

Having this information can help you make smart decisions about when to apply for loans or how soon to pay off an outstanding balance. Some monitoring services even let you project the impact of different financial moves, such as applying for a credit card or making a major purchase.

Each of the three bureaus offers credit monitoring services, but not all of them are free. Many banks, credit card issuers, and financial apps also offer credit monitoring services. It’s best to start exploring what you can already access for free, then compare the features of paid credit monitoring services to decide if you need more

Keep Tabs On Your Credit

You may not interact with them frequently, but Equifax, Experian, and TransUnion play an important role in your financial life. The information they collect about your borrowing habits will directly affect your ability to borrow more down the road, so it’s a good idea to check your reports from each bureau at least once a year and ensure they’re error free.

It’s also important to recognize that your creditors will report your borrowing behavior to the credit bureaus. Late payments, delinquent accounts, excessive credit applications, and other risky financial moves can hurt your credit and make it harder to qualify for loans in the future. If you’re struggling to keep up with debt, reach out to your lenders to seek help before they start reporting to the credit bureaus.

Frequently Asked Questions (FAQs)

Find out more

• Explore the 5 Cs of Credit – Discover the five critical factors that shape your creditworthiness.
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• Cheapest Credit Repair Services – Repair your credit without breaking the bank.
• Understanding Credit Repair Cost – Get insights into the costs of credit repair.
• FICO vs VantageScore – Understand the differences between these credit-scoring models.
• Build Credit Fast – Quick tips to improve your credit score rapidly.

Luke Daugherty Author

Luke Daugherty is a freelance writer, editor, and former operations manager. He covers personal finance, operations, marketing, and sustainable business, as well as many of his personal passions. His work, bylined and ghostwritten, has appeared in The Balance, CNET, CIO Magazine, Entrepreneur, and more.