Posted 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.

1. Big 3 Credit Bureaus
2. TransUnion
3. Equifax
4. Experian
5. The Big 3 Credit Bureaus’ Credit Scores
6. Alternative Credit Bureaus
7. Ask the Experts: Reporting on Credit Reporting

Big 3 Credit Bureaus

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.

TransUnion

Year 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 Report

Like 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.

Equifax

Year 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 Reviews

Equifax 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.

Experian

Year 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 Reviews

Experian 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 Scores

TransUnion, 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% Free

VantageScore 4.0 is coming fall 2017.

Alternative Credit Bureaus

Experian, 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 Reporting

To 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

Carroll S. Little Instructor and Chair of the Accounting Department in the School of Business at Howard University What percentage of people do you think can name the big three credit bureaus? About 10%. What is the biggest misconception people have about the credit bureaus? The bureaus intentionally do not update their information in a timely fashion, when they receive reliable information from the "person effected." Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal? I think, like most others, that the major credit bureaus are "pretty much equal." Is it important for people to check their reports from non-traditional credit reporting agencies? I am not aware of "non-traditional credit reporting agencies." Janet Mosebach Associate Professor of Accountancy in the College of Business and Economics at Boise State University What percentage of people do you think can name the big three credit bureaus? I'm not sure what this percentage is but I'll bet it is fairly low; most likely well under 10%. If someone just applied for a loan, they probably know the name of the credit reporting bureau their lender used but that's it. What is the biggest misconception people have about the credit bureaus? I think people are scared of credit bureaus because of the impact your credit score and credit history can have on you; your ability to borrow, the interest rate you'll pay, the cost of insurance, etc. I believe a credit bureau is viewed by many as the bad guy when all they are really doing is gathering data on your past credit practices and behavior. Is it important for people to check their reports from non-traditional credit reporting agencies? Most people don't check their credit reports from the big three credit bureaus on a regular basis even though they can do this for free once a year. Consequently, I doubt most people are even aware of other credit reporting agencies. Because non-traditional credit reporting agencies may use data not used by the big three, they can provide a slightly different picture of a person's credit profile. Information is power so the more you can know about your credit report and what it says to lenders, insurance companies, landlords, employers, etc., the better you can understand its impact on you. Rodney Sauder Assistant Professor of Accounting at Messiah College What percentage of people do you think can name the big three credit bureaus? Between 1 and 5%. What is the biggest misconception people have about the credit bureaus? They do not understand how they create the credit scores, which makes people feel powerless in improving their score to a point that gives people greater access to financing. Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal? Pretty much equal. Is it important for people to check their reports from non-traditional credit reporting agencies? I do not think so. 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 What percentage of people do you think can name the big three credit bureaus? I don’t think this is a big number, and the unasked question here is whether it needs to be. I don’t think the knowledge of the name of the bureaus is as important as knowing and understanding what is included in a credit report, how actions that we take can influence it (positively or negatively), how creditors use credit reports from these bureaus to make credit-granting decisions, and how to correct an inaccurate or incomplete credit report. I’m afraid that too few people know and understand these important points, and it is not surprising. Credit scores are proprietary, so the specific formulae used to determine the scores is not publically available. As a result, consumers have neither precise data with which to make informed decisions about the impact of their previous credit choices on their current score, nor the information to make better decisions in the future. The feedback provided on credit reports is often vague (e.g., the outstanding balance on your card in proportion to your credit limit is too high), which can lead to two outcomes: pay down the balance on the card (which is probably a good idea), or petition the card company to increase the card’s credit limit (which may lead to more debt). Either choice has the potential to overcome this negative feedback, but the long-term effect of choosing the first over the second can be quite different. What is the biggest misconception people have about the credit bureaus? I think the biggest misconception that people have about credit bureaus is that they control the distribution of credit to the public. The ratings provided by credit agencies are tools used by creditors to make decisions, and the credit bureau itself is not approving or disapproving credit applications. Rather, the creditor is making this decision. Creditors don’t help this disillusion, as they often blame credit scores as the reason for the denial of credit. Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal? In my opinion, the credit agencies are pretty much equal. When I apply for a substantial amount of credit (e.g., a loan for a home), the bank pulls all three credit bureau scores, and typically uses the score in the middle. I do not believe that any of the three credit bureaus is better or more precise than another, has an advantage or disadvantage with respect to the validity of their credit score model in predicting future repayment behavior over another, or is more or less responsive to the needs of the public than the other. Is it important for people to check their reports from non-traditional credit reporting agencies? I think it would be more helpful to obtain a greater understanding of both the credit score and credit report of the three major credit bureaus, rather than identifying and understanding alternative, non-traditional credit agencies. Non-traditional agencies claim to use credit performance information not provided to the big 3 credit agencies. How do they do that? What value does this information have over the information obtained by the big 3 credit agencies, and how does this non-traditional information provide superior predictive value over that used by the major agencies? Further, until you know which, if any, of these non-traditional agencies are being considered by your creditor, you are probably not able to even know the names of these agencies, or how to obtain a score. Most people should be concerned with the establishment of a long-term, successful record of credit use, and the monitoring of credit reports and scores for credit fraud. Laura Wolff Instructor of Economics and Finance at Southern Illinois University Edwardsville What percentage of people do you think can name the big three credit bureaus? I think very few people could name the three credit agencies. In my experience, people are becoming more familiar with the idea of a FICO score. Since they get that for free, often now from their bank or credit card, they think that is all they need to know. I require the students in my personal finance classes to get a credit report from one of the three agencies, and they are often surprised by what it includes. They have found misinformation and information about accounts they forgot they had, or that other people opened. I encourage people to get a report from each of the agencies once a year, which is free, and to schedule that so they are doing one every three months. Kirby R. Cundiff Program Chair and Collegiate Professor of Accounting and Financial Management in The Graduate School at the University of Maryland University College What percentage of people do you think can name the big three credit bureaus? Less than ten percent. Probably the consumers that are most familiar with the credit bureaus are those that have had adverse credit decisions and are appealing them. What is the biggest misconception people have about the credit bureaus? The belief that checking your own credit score will affect your credit score. Checking your own credit score is considered a soft inquiry, and does not affect your credit score. Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal? Equifax, Experian, and TransUnion are all for-profit, publicly traded companies. Their processes are very similar, but not all of them will have the same data on a given consumer. The three major credit agencies’ numerical grade reports are slightly different. Equifax has had a major credit breach which has given them a bad name. Is it important for people to check their reports from non-traditional credit reporting agencies? For most people, no. An organization like PRBC could be useful for a consumer trying to build credit based on data such as paying cell phone and utility bills on time. Alvenetta Wilson Business Office Technology Professor at San Jacinto 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.

• 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 Business

  What 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 College

  What 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.

  
  
  from Wallet HubWallet Hub
  
  
  via Finance Xpress