Also called Credit Reporting Agencies
Credit bureaus, including Experian, TransUnion, and Equifax, gather information to inform institutions if you are financially stable and trustworthy.
A credit bureau is a business organization that collects and sells data regarding the credit history of individuals. They typically collect data such as your credit card and loan balances, the number of credit accounts you have, your payment history, any bankruptcies, etc. Today, there are dozens of credit bureaus, but the “big three” as they are known, are Equifax, Experian, and TransUnion.
01 HOW DO CREDIT BUREAU COMPANIES COLLECT MY INFORMATION?
Credit bureaus mainly collect information from credit institutions with which you already have a relationship, such as:
Banks
Credit card companies
Student loan providers
Auto loan providers
Credit bureaus do not have access to these accounts; instead, the credit institutions share the information with the credit bureaus.
Credit institutions are not obligated to share information and can give data to one, two, three, or none of the major credit bureaus.
Typically, credit bureaus store data on your balances, available credit, payment history, and the number of open and closed accounts you have. Collection agencies and debt collectors may also report to the credit bureaus if you have any delinquent activity.
The rest of the information credit bureaus collect comes from public court records. They access these records in search of any possible bankruptcies, tax liens, repossessions, and foreclosures.
02 WHEN WILL I USE A CREDIT REPORTING AGENCY?
You will use a credit bureau anytime you want to know or need to know your credit report or credit score. Here are five of the most common scenarios for when you will use a credit bureau:
When applying for a loan
Before renting an apartment or house
To improve your credit score
To check for credit errors
To prevent fraud and identity theft
03 THE MAIN PURPOSE OF CREDIT BUREAUS
Credit reporting bureaus are an important part of your financial health. The credit reports and scores they collect allow you to prove your integrity as a borrower, make important business decisions, and prevent credit errors/fraud.
Once you get your credit report or score, you might realize it needs a bit of a boost.
You may also be surprised to know that credit bureaus don’t just collect individual’s credit information, they also collect credit information for businesses. Every business can have a credit report and credit score. Learn more about business credit scores to better understand how they can help you grow!
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