Credit Reporting Agencies: Big 3 & Alternative Bureaus
10:12 AMPosted by: John S Kiernan
There are nearly 40 credit reporting agencies in the U.S. But just three of these so-called credit bureaus dominate the market: TransUnion, Equifax and Experian.
The big three credit bureaus collect information about how we manage our financial obligations. The bureaus then sell this info to lenders and credit-scoring companies, which use it to help determine eligibility for loans and lines of credit. Employers, car dealers, property management companies and various other decision-makers also use data from the three credit bureaus to evaluate applicants.
You probably know that you can get a free copy of your credit report from each of the three major credit bureaus once every 12 months. You can also get your TransUnion credit report, updated daily, for free on WalletHub. But you shouldn’t stop there.
It’s worth learning a bit more about these companies that already know so much about us. And we’ll start with a quick overview of how to contact each major credit bureau in case you find a mistake on one of your credit reports. Credit-report errors are far too common, after all. And they can wind up costing you money if left unaddressed.
- Big 3 Credit Bureaus
- TransUnion
- Equifax
- Experian
- The Big 3 Credit Bureaus’ Credit Scores
- Alternative Credit Bureaus
- Ask the Experts: Reporting on Credit Reporting
Credit Bureau | Mailing Address | Phone Number | Better Business Bureau Rating |
---|---|---|---|
TransUnion | P.O. Box 1000 Chester, PA 19022 | 1-800-916-8800 | A- |
Equifax | P.O. Box 740241 Atlanta, GA 30374-0241 | 1-800-685-1111 | A |
Experian | P.O. Box 2104 Allen, TX 75013-0949 | 1-888-397-3742 | B+ |
Below, you can learn more about the big three credit bureaus as well as the alternative credit bureaus that you may encounter at some point in your credit career.
TransUnionYear Founded | 1968 |
Headquarters | Chicago |
Number of Employees | 4,700 |
Ownership | Public |
Stock Ticker Symbol | TRU |
TransUnion has credit reports for more than 500 million people worldwide. It also has rather humble roots. It was actually formed (in 1968) to be the holding company for Union Tank Car Company, which leased railcars. And TransUnion didn’t get into the credit-reporting business until a year later, when it acquired the Credit Bureau of Cook County.
The Credit Bureau of Cook County was notable for using 400 seven-drawer filing cabinets to store its 3.6 million records. But the company has come a long way since then.
TransUnion now provides data-tracking and analytics services to a wide range of businesses. And it offers credit reports, scores and monitoring services to consumers.
Get Your TransUnion Credit ReportLike Equifax and Experian, TransUnion has been the subject of lawsuits and government penalties relating to its credit-reporting practices over the years. It received a $2.5 million fine from the FTC in 2000 and lost a pair of consumer suits in 2003 and 2006.
TransUnion is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol TRU. Its largest shareholders are Goldman Sachs and Advent International.
EquifaxYear Founded | 1899 |
Headquarters | Atlanta |
Number of Employees | 9,500 |
Ownership | Public |
Stock Ticker Symbol | EFX |
Equifax focuses on the business-to-business space, selling consumers’ credit and insurance data to financial institutions, government agencies, insurance providers and retail companies. But it has also been selling credit reports, credit scores and credit monitoring to the general public since 1999.
Read Equifax ReviewsEquifax is the oldest of the big three credit bureaus. And the company has faced its fair share of controversy over the years. Some people even allege that it changed its name from Retail Credit Company to Equifax because of bad press.
Media reports in the 1960’s and early 70’s revealed growing concern that the company was collecting information on people’s sex lives, marital strife and political activity. The controversy ultimately led to the passage of the Fair Credit Reporting Act (FCRA) in 1970. And the Retail Credit Company became Experian five years later.
“The basic objective of this act is to protect consumers from inaccurate and obsolete information in credit reports about them and to protect their privacy,” says Emmanuel Roussakis, a professor of finance at Florida International University.
Equifax has since come under scrutiny for violating the FCRA. Along with Experian and TransUnion, Equifax received a $2.5 million fine from the Federal Trade Commission in 2000. It settled an FTC lawsuit for $250,000 in 2003. And in 2013, the company lost an $18.6 million lawsuit stemming from uncorrected errors on an individual’s credit report.
ExperianYear Founded | 1996 |
Headquarters | Dublin, Ireland |
Number of Employees | 17,000 |
Ownership | Public |
Stock Ticker Symbol | EXPN.L |
Experian was created when the now-defunct British retailer GUS acquired TRW Information Services – the largest U.S. credit bureau at the time. Experian has since expanded around the globe, from its Dublin, Ireland corporate headquarters to its operational hubs in England, Brazil and California. The company now employs more than 6,000 people in North America alone.
Experian’s business concentrates on credit, marketing and consumer services as well as analytics. It tracks information on consumers, businesses, insurance, motor vehicles and select lifestyle characteristics.
Read Experian ReviewsExperian has come under fire on both sides of the Atlantic in recent years. In January 2011, The Daily Mail published an article highlighting consumer outrage over the company’s practice of advertising free credit reports only to enroll people in a hard-to-cancel monthly subscription service. FreeCreditReport.com, which is owned by Experian, has drawn similar ire from U.S. consumers.
In addition, a February 2013 60 Minutes piece about the prevalence of errors on American credit reports included interviews from three former Experian employees who alleged that company policies restricted them from fully investigating consumer disputes.
The Big 3 Credit Bureaus’ Credit ScoresTransUnion, Equifax and Experian joined forces in 2006 to create a new type of credit score: the VantageScore. It was designed to compete with the Fair Isaac Corporation’s FICO Scores. And the first model – VantageScore 1.0 – was capable of scoring 15 million more people than other credit scores at the time.
The more-predictive VantageScore 2.0 was introduced in 2012. And VantageScore 3.0 followed in 2013. VantageScore 3.0 adopted the 300 to 850 credit score range and allows up to 35 million more people to get credit scores than competing models. You can check your latest VantageScore 3.0 credit score for free on WalletHub. You can also learn more from our VantageScore and Vantage vs. FICO guides.
Check Your Credit Scores - 100% FreeVantageScore 4.0 is coming fall 2017.
Alternative Credit BureausExperian, Equifax and TransUnion aren’t the only credit reporting agencies on the block. There are tens of other companies – big and small – that are active in the space. Most have carved out a niche for themselves, from tracking rent and utility payments to monitoring checking-account management and insurance consumption.
Here’s a quick overview of who the alternative credit bureaus are and what types of information they track:
Reporting Agency | Type of Info |
---|---|
Accurate Background | Background Checks |
Certegy Check Services | Banking |
ChexSystems | Banking |
CL Verify Microbilt | Banking, Credit History, Background Checks, Employment History |
Clarity Services | Credit History from Small or High Risk Lenders, Banking |
Contemporary Information Corp. | Background Checks, Rental History |
CoreLogic Saferent | Rental History |
CoreLogic CoreScore | Rental History, Credit History From Small or High Risk Lenders, Public Information |
DataX | Credit History from Small or High Risk Lenders |
Early Warning Services | Banking |
EmployeeScreenIQ | Background Checks |
Factor Trust | Credit History From Small or High Risk Lenders, Public Information |
First Advantage | Background Checks |
GIS | Background Checks |
HireRight | Background Checks |
ID Analytics | Identity Protection Analytics |
Infocubic | Background Checks |
Innovis | Credit History |
Insurance Information Exchange | Motor Vehicle Records, Employment History, Insurance History |
Insurance Services Office | Insurance History |
L2C | Credit History From Small or High Risk Lenders |
Leasing Desk | Rental History |
Lexis Nexis Screening Solutions | Employment History |
LexisNexis (CLUE Auto) | Auto Insurance History |
LexisNexis (CLUE Personal) | Insurance History |
Medical Information Bureau | Medical Records |
Milliman IntelliScript | Medical Records |
National Consumer Telecom and Utilities Exchange | Telecom History, Utilities History |
Pay Rent Build Credit | Rental History, Utilities History |
Pre-employ.com | Employment History, Background Checks |
Resident History Reports | Rental History |
Telecheck | Banking |
Tenant Data Services | Rental History |
The Work Number | Employment History |
Trak 1 Technology | Background Checks |
Verifications Inc. | Background Checks |
Financial services companies, employers, landlords, etc., often consider information from these sources when evaluating applicants. After all, the more data that banks and other consumer-facing companies have, the more accurate their analytics and underwriting practices will be.
But they don’t rely on these alternative credit reporting agencies nearly as much as the big three credit bureaus.
Ask the Experts: Reporting on Credit ReportingTo help you learn more about the business of credit reporting and how it impacts daily life, we posed the following questions to a panel of credit experts. You can meet them and check out their responses below.
- What percentage of people do you think can name the big three credit bureaus?
- What is the biggest misconception people have about the credit bureaus?
- Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal?
- Is it important for people to check their reports from non-traditional credit reporting agencies?
- Carroll S. Little Instructor and Chair of the Accounting Department in the School of Business at Howard University
- Janet Mosebach Associate Professor of Accountancy in the College of Business and Economics at Boise State University
- Rodney Sauder Assistant Professor of Accounting at Messiah College
- Bradrick M. Cripe Assistant Chair in the Department of Accountancy Curriculum Committee and Gaylen and Joanne Larson Professor of Accountancy in the College of Business at Northern Illinois University
- Laura Wolff Instructor of Economics and Finance at Southern Illinois University Edwardsville
- Kirby R. Cundiff Program Chair and Collegiate Professor of Accounting and Financial Management in The Graduate School at the University of Maryland University College
- Alvenetta Wilson Business Office Technology Professor at San Jacinto College
- Elaine Worzala Professor of Real Estate in the Department of Finance and Director of the Carter Real Estate Center in the College of Charleston School of Business
- John D. Rossi, III Associate Professor of Accounting at Moravian College
What percentage of people do you think can name the big three credit bureaus?
Approximately 10 percent.
What is the biggest misconception people have about the credit bureau?
The biggest misconception that people tend to have is that there's no reason to check their credit often if they have decent credit, because the credit bureau produces accurate information.
Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal?
Pretty much equal with categories, but have different ways of presenting the data:
- Equifax -- accounts are grouped together and listed alphabetically;
- Experian -- provides a monthly balance history from inception;
- TransUnion -- color-coded boxes indicate history -- easy to see missed payments.
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Is it important for people to check their reports from non-traditional credit reporting agencies?
Yes. There are several credit reporting agencies, but only three are utilized by most lenders -- Equifax, Experian and TransUnion. Individuals should research and check all credit reporting agencies to clear any inaccuracies, including fraudulent activities.
Elaine Worzala Professor of Real Estate in the Department of Finance and Director of the Carter Real Estate Center in the College of Charleston School of BusinessWhat tips do you have for a person trying to increase their credit score in a short amount of time?
Pay off your credit card balances if you have them. Pay off your car loan if you have one. This assumes you have money to do that. Be sure to make all of your payments on time. Late payments are credit killers. Close out the credit cards that you are not using.
What are some commonly held misperceptions about how credit scores are calculated?
Some people don’t understand the gravity of making a late payment on a credit card. Late payments will definitely impact your score, so try to pay on time or early, if possible. Paying off your entire balance is best, but if you can’t make the whole payment, try to at least make the minimum payment.
Another misconception people have is that the number of credit cards you have is not important. People don’t realize that promotional credit card programs (e.g., “get a Macy’s card and save 15 percent on your purchases today”) will impact your credit score as well. Inquiries into your credit impact your credit score negatively. Credit scores are impacted by the number of inquiries, too.
Which is the best way for a young person to build credit?
Take out a credit card in your name. Use it to pay for things, but pay it off each month. Do not let balances get high. And, make sure you pay on time. Rent an apartment so you can show you pay your rent on time. Buy your car with a loan, but again, make sure you make the payments -- and if you can, pay it off early, that looks good as well.
Don’t have too many credit cards. The credit agency has to assume you might use any card that is open. Be sure to close any credit cards you are not using.
John D. Rossi, III Associate Professor of Accounting at Moravian CollegeWhat percentage of people do you think can name the big three credit bureaus?
Less than one third -- if I had to pick a number, about 20 percent.
What is the biggest misconception people have about the credit bureaus?
That they are all the same number (i.e., you only have one credit score and they are all the same). Deleting errors is difficult, but most agencies allow you to put an explanatory statement in your file -- often on their website. I can give free manure to anyone who is happy with free.
Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal?
Your credit score is an average of the three major credit bureau's standards, they are pretty much equal (their criteria for scoring is similar, the range will vary somewhat). It is possible that one could have picked up some negative information in error, and the other two have not. It is a good idea to check all three for errors.
Is it important for people to check their reports from non-traditional credit reporting agencies?
Is it important for people to check their reports from non-traditional credit reporting agencies? Generally, yes. There may be errors and it is a good idea to deal with them before a company may look at it (you never know who will take a peek at your score with non-traditional agencies), before you get denied for credit.
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