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What do the 3 credit bureaus do?

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Published on July 31, 2024 | 8 min read

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Key takeaways

  • The three major credit bureaus are Equifax, Experian and TransUnion.
  • The credit bureaus manage records on your accounts, balances and the payments you make.
  • Each credit bureau operates independently. They may have different information for each individual and assign different credit scores.
  • The three main credit bureaus are regulated by the Fair Credit Reporting Act, which limits how they collect and share your financial data.

Credit scores are complex, and many people don’t realize they have more than one. There are different scoring models, like FICO and VantageScore, as well as three major credit bureaus — Equifax, Experian and TransUnion — which each generate their own scores.

Whether you’re trying to build credit, planning to finance a major purchase or working on credit repair, it’s important to understand the major credit bureaus and how they influence your credit score.

What is a credit bureau?

A credit bureau is a data-gatherer that makes an individual’s credit details available to other companies, such as banks, car dealers and credit card issuers. The bureaus then consolidate this information into a credit report and create a credit score for each individual.

What are the three major credit bureaus?

Three main credit bureaus handle the details that make up your credit scores: Equifax, Experian and TransUnion.

While each credit bureau offers an array of products and services, they perform the same tasks when it comes to monitoring consumer credit information. Specifically, they each manage their records, which include information on accounts you have, balances you owe and payments you make.

Because each credit bureau operates independently, they don’t always have the same information for each individual. If you have a credit card, mortgage or loan, you have a credit file with at least one of the three credit bureaus, if not all three.

Equifax

Equifax has been in business since 1899. In addition to compiling and assessing consumer credit information, the company also offers credit and identity monitoring services. In addition, Equifax provides resources for consumers who want to improve or build credit or put a credit freeze in place.

Experian

As one of the biggest credit bureaus worldwide, Experian supports clients in over 100 different countries. The company maintains credit information on approximately 245 million U.S. consumers and 99.9 percent of U.S. businesses. It also offers credit monitoring, free credit scores and additional tools for consumers.

TransUnion

TransUnion has a large global presence, reportedly overseeing the credit information of hundreds of millions of people in 30 countries. Like the other major credit bureaus, TransUnion offers identity and credit monitoring, free credit tools and credit resources and information concerning legal rights under the Fair Credit Reporting Act (FCRA).

What information do the credit bureaus collect?

The credit bureaus monitor an array of information that helps them determine your creditworthiness. Data they compile typically includes identifying information, like your name, addresses (past and present), Social Security number and date of birth. Other information collected includes:

  • Account balances and credit limits
  • Credit activity, including hard credit inquiries
  • Debt collections and bankruptcies
  • Payment history, including late or missed payments
  • Status of your accounts
  • When accounts have been opened or closed

How do the credit bureaus measure your credit score?

Credit bureaus measure your credit score using complex algorithms that analyze the data in your credit report. The two primary scoring models are FICO and VantageScore.

FICO Score model

The FICO score, developed by the Fair Isaac Corporation, is one of the most widely used credit scoring models. It evaluates five key factors:

  • Payment history (35%): Whether you consistently pay balances due on time.
  • Amounts owed (30%): The total debt you owe compared to your available credit limits.
  • Length of credit history (15%): The age of your oldest account, the age of your newest account and the average age of all your accounts.
  • Credit mix (10%): The diversity of your different types of credit accounts (such as credit cards, mortgage loans and auto loans)
  • New credit  (10%): How many new accounts you have opened recently and the number of hard inquiries on your report.

VantageScore model

VantageScore, created by the three major credit bureaus (Equifax, Experian and TransUnion), uses a slightly different approach to calculate your credit score. The VantageScore model looks at the following factors:

  • Payment history (40%): Whether you consistently pay balances due on time.
  • Age and type of credit (21%): Average age of accounts and variety of credit types you currently have.
  • Credit utilization (20%): How much of your available credit you’re using.
  • Balances (11%): The total balances on your credit account.
  • Recent credit (5%): Recent credit behavior, including new accounts and hard inquiries.
  • Available credit (3%): The amount of credit you have available but are not using.

What are the main differences between credit bureaus?

In general, all three credit unions collect similar information and offer the same services, such as credit scores, credit monitoring and other financial tools. The primary differences are the score ranges and calculations used to create credit scores.

Feature Experian Equifax TransUnion
Credit score range 300-850 (FICO) 280-850 (FICO) 300-850 (FICO)
Credit factor breakdown
  • Payment history: 35%
  • Credit utilization: 30%
  • Credit age: 15%
  • Types of credit: 10%
  • Number of inquiries: 10%
  • Payment history: 35%
  • Credit utilization: 30%
  • Credit age: 15%
  • Types of credit: 10%
  • Number of inquiries: 10%
  • Payment history: 40%
  • Credit utilization: 20%
  • Credit age: 21%
  • Recently reported balances: 11%
  • New credit: 5%
  • Available credit: 3%

How do the credit bureaus get your information?

Credit bureaus gather information from a variety of sources to compile your credit report.

Financial institutions

Credit card issuers, banks, mortgage lenders and other financial institutions regularly report information about your credit accounts to the credit bureaus. This includes details such as account balances, payment history, credit limits and the status of your accounts.

Lenders, creditors and collection agencies

Any time you apply for credit, lenders and creditors may perform a hard inquiry on your credit report. This is reported to credit bureaus and can impact your credit score. Lenders also report the details of new accounts you open.

If you have accounts sent to collections, collection agencies also report this information to the credit bureaus.

Public records

Credit bureaus collect information from public records, including bankruptcies, tax liens and civil judgments. These records provide insight into significant financial events that may impact your creditworthiness.

Utility companies and landlords

Sometimes, utility companies and landlords may report your payment history to the credit bureaus. While not as common, this information can also appear on your credit report, especially if there are any delinquencies or collections.

Self-reported data

Some credit bureaus, like Experian, allow consumers to add additional information to their credit reports, such as rental payment history, through services like Experian Boost. This can help improve your credit score by incorporating positive payment data that might not otherwise be included.

How does my credit information stay private?

The Fair Credit Reporting Act (FCRA) is a federal law that ensures the accuracy, privacy and fairness of consumer credit information handled by credit bureaus.

Credit bureaus can gather information on your credit activities without needing your explicit consent. However, for businesses to access this information via a credit check, they must have a legitimate reason as defined by the law. Typically, these businesses will notify you when they request your credit report, maintaining transparency and adherence to legal standards.

Why are credit scores different?

Credit scores from each credit bureau can vary for many reasons. For starters, each bureau may maintain different information on each consumer. They might also give more weight to specific factors when determining a credit score.

The type of credit score a credit bureau assigns may be different. For example, you may get a FICO credit score from one bureau and a VantageScore from another.

If you have your credit scores pulled at different times, you may also see varying scores due to the passage of time and more information being added to your credit reports.

Which credit bureau is the most important?

No single credit bureau is more important than the others. Each collects and reports valuable credit information.

Depending on their specific criteria and needs, lenders may use one or more bureaus. For example, a mortgage lender might pull reports from all three bureaus to get a comprehensive view of your credit, while an auto lender might rely on just one. Some credit cards, loans or rental applications may require a report from a particular bureau.

Knowing which bureau is used in these situations can help you better manage your credit.

Do you need all three credit scores?

It is possible to have a credit score with only one or two of the credit bureaus, particularly if you’re just starting to build credit.

Each bureau has its own criteria for generating a score. If you have not yet met the criteria, you may not have a score with that particular bureau.

For example, to have a FICO score with a bureau, your credit report must include at least one undisputed account that is six months or older and has been updated in the past six months.

If you lack credit scores from all three bureaus, it may be harder to get approved for the best credit cards and loans. Since each lender may check different bureaus when assessing your creditworthiness, working on building your credit and improving your credit score with all three bureaus always makes sense.

How do you check your credit report?

You can get a free copy of your credit report from each of the three major credit bureaus by visiting AnnualCreditReport.com. Simply visit the site, fill out the required information and select which bureau’s report you’d like to view. You can also request your reports by phone or mail if you prefer.

Regularly reviewing your credit reports helps you stay informed about your credit history and spot any errors or signs of identity theft.

What do you do if you find a mistake in your credit score?

It’s important to dispute errors on your credit report as soon as you uncover them. Do this by mailing a letter to each of the credit bureaus explaining the error. In your letter, you’ll need to include the following information:

  • Your name and contact information
  • An explanation of mistakes on your credit report
  • The company that reported the incorrect information
  • A copy of your credit report with the mistakes highlighted or circled
  • Supporting information that shows why the information is wrong
  • A request for the information to be updated or removed

You can dispute incorrect information on your credit reports with each of the credit bureaus by contacting them:

Experian Equifax TransUnion
Online Experian website Equifax website TransUnion website
By phone 1-888-397-3742 1-866-349-5191 1-800-916-8800
By mail ExperianP.O. Box 4500Allen, TX 75013 EquifaxP.O. Box 740256Atlanta, GA 30374-0256 TransUnionP.O. Box 2000Chester, PA 19016-2000

You can also use a credit repair company for help.

Does your credit report include your credit score?

While your credit report provides detailed information about your credit history, it does not automatically include your credit score.

It’s a great idea to regularly review both since checking your credit score can help you understand how your credit behavior impacts your overall creditworthiness. It also allows you to track your progress over time.

How do you check your credit score?

Many banks, credit card issuers and financial institutions offer free access to your credit score as a perk for being a customer. Several online services also provide free credit scores and monitoring tools.

If you can’t access your score for free, you may consider purchasing it directly from the credit bureaus or through FICO’s website.

The bottom line

The three main credit bureaus pull from various information to put your credit reports together. Understanding the differences between the credit bureaus and how they collect and report information can help you better manage your credit score.

Whether you are building credit from scratch or maintaining an established credit history, knowing which bureau’s data a potential lender might use can give you an edge in preparing for major financial decisions.

Take advantage of your free annual credit report from AnnualCreditReport.com. If you find an error, contact the credit bureau and file a dispute. Regularly monitoring your credit report and credit score will help you manage your credit effectively and monitor your progress.