About the Big Three Credit Bureaus
A credit bureau is an information clearinghouse that compiles information on consumers. The credit grantors, or lenders, report consumer payment history to the credit bureaus. The credit bureaus then compile that information together with information on tax liens, bankruptcies, and court judgments that is available in public records. In return, when consumers apply for credit, lenders can check credit reports to determine the creditworthiness of consumers.
There are hundreds of local and regional credit bureaus, but almost all of them maintain a reporting relationship with one of the “Big Three” credit bureaus: Equifax, Experian, and TransUnion. Between them, these credit bureaus maintain credit reports on more than 170 million Americans which provides credit scores. The data is used primarily by potential lenders, who check credit reports when determining whether to approve or deny credit applications.
You may have also heard about Innovis. This “fourth credit bureau” collects consumer data and sells it to creditors for the purpose of creating mailing lists. Individuals also should check their own credit reports on a regular basis to make sure the information is correct, and as a means of detecting identity theft.
Equifax is the grand-daddy of the “Big Three” credit reporting agencies. In business for 107 years, it originally opened its doors in 1899 and has grown to include more than 4,000 employees in 12 countries today. Equifax is a data aggregator, meaning that it compiles credit payment histories on consumers and provides that information to decision-makers at lending institutions. Equifax has expanded its products to include those for individuals as well as businesses.
Experian is relatively new, but no less influential, on the credit bureau scene. In business for about 30 years, Experian (formerly TRW) offers the usual credit reporting and decision-making and information management services to lenders and other businesses.
TransUnion, similar to Experian, has been in the credit reporting business for about 40 years. It was the first of the credit reporting bureaus to provide online reporting and information retrieval services to its customers. As with the other two large credit bureaus, TransUnion offers an array of business and consumer risk- and credit-management products that are available via its Web site.
If you are a consumer considering purchasing a Equifax, Experian or TransUnion credit report, remember that federal law entitles each consumer to one free credit report every 12 months. For more information on how to obtain your free credit check, visit www.annualcreditreport.com.
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