What Are the Three Credit Reporting Agencies?

If you’re striving to improve your credit score (and who isn’t?), it’s important to know more about what affects your score and how it is calculated. Behind the scenes, three credit reporting agencies greatly impact your credit score.

But what are the three credit reporting agencies? And how do they influence your credit score?

What Is a Credit Reporting Agency?

Also known as a credit bureau, a credit reporting agency is a business that gathers data about your spending habits and credit card usage in order to create a credit report. This information comes from your creditors (like your mortgage lender or credit card company), who report your payment history to the bureau. The credit reporting agency also collects data from foreclosures, repossessions, and other public records in order to determine your credit score.

What Information Is in a Credit Report?

Credit reports detail your payment history, credit inquiries, and other public records that could influence your credit score. They also contain basic personal information like your name and social security number.

Every credit reporting agency calculates credit scores in a slightly different way, but most of them take the following into account: 

  • Amount of money you owe
  • Number of new credit accounts
  • Length of credit history
  • Diversity of credit
  • Payment history

Why Are Credit Reporting Agencies Important?

So why are credit reporting agencies something you should care about? To start, they create the reports that determine your credit score. And lenders use those credit scores to evaluate whether they want to offer you a loan—or to determine the interest rates you’ll get with your loan.

Credit reports also come into play when you’re getting a background check, applying for a lease, buying insurance, or paying a utility deposit.

The Three Credit Reporting Agencies

All credit reporting agencies are private companies that create and analyze consumer credit reports. These agencies are regulated by the government according to the Fair Credit Reporting Act.

The three credit reporting agencies are:

  • Experian: An Atlanta-based company with about 11,000 employees and operations in 24 countries around the world. 
  • Equifax: Originally handling credit reports for the Western U.S., Equifax now operates in 37 countries and is based in Costa Mesa, California.
  • TransUnion: This Chicago-based agency has more than 8,000 employees and has offices all over the world, from South Africa to Colombia.

Why Are There Three Credit Reporting Agencies?

Credit reporting has been part of American life for more than 100 years. In its infancy, most credit reporting was conducted locally. But with the rise of the internet and other technology, credit reporting has become a highly efficient, automated system. This has led to the consolidation of hundreds of credit reporting companies into three main agencies. All of these agencies serve consumers nationwide.

How Do These Credit Reporting Agencies Differ?

With three main credit reporting agencies in the U.S., you may wonder if they each serve a different purpose. But in fact, all three credit reporting agencies are quite similar in their purpose and services offered.

The main difference between these agencies lies in how their credit scores are calculated and the data they collect. Vendors do not send purchase history data to all three agencies, so your credit score may differ slightly across the three bureaus.

How Can You Check Your Credit Report?

All Americans have the right to check their credit report, and each of the major agencies are required to provide a free credit report once per year. You can get a copy of your reports by visiting AnnualCreditReport.com to make a request.

If you want more than one credit report per year, you can purchase one directly through the credit reporting agency.

You can also check your credit score for free at any time using numerous credit score services online.

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