What Are The Three Credit Bureaus?

The information in your credit report determines if you can obtain a loan, get auto insurance, and hook up utilities without a down payment. It even can affect your ability to secure a job. Your credit score is determined based on information collected by the three main credit bureaus – and it can have a significant impact on your financial life. Here’s a closer look at what credit bureaus are, what they do, and how you can ensure they have the correct information about your finances.

Key Takeaways:

• A credit bureau is a company that collects financial information from creditors and banks to compile a borrower’s credit report.
• The three major credit bureaus are Experian, Equifax, and TransUnion.
• Credit bureaus gather information about your payment history, amounts owed, credit lines and limits, bankruptcies, and any accounts sent to collections.

What Do Credit Bureaus Do?

Three credit bureaus collect, analyze and report information on your credit report: Equifax, Experian, and TransUnion. These credit reporting agencies collect information about how much debt you take on and your payment directly from credit card companies, mortgage lenders and banks.

Credit bureaus use your credit history to calculate your credit score, a three-digit number representing your creditworthiness. Higher credit scores are better than lower scores. Lenders use your credit report and score to gauge how much risk you pose as a borrower. Borrowers with higher credit scores are more likely to get approved for loans or credit. Lenders also offer borrowers with higher scores lower interest rates and better terms.

Credit scores range from about 300 to 850 and are divided into ranges:

Equifax

Equifax was founded in 1899 in Atlanta by two brothers and is a publicly traded company. It is the second-largest credit bureau in the United States.  The company had a severe data breach in 2017 that resulted in a settlement. Equifax uses the FICO scoring model to determine your credit score, which can range from 280 to 850. The company weighs information in your credit report when calculating your credit score as follows:

Experian

Experian is the largest credit bureau in the United States and a publicly traded company. It manages credit information for more than 220 million users. The company had a severe data breach in 2015. Equifax uses the FICO model to determine your credit score, ranging from 300 to 850. They weigh your credit report as follows:

TransUnion

TransUnion gathers credit-related information on more than 1 billion consumers in over 30 countries. They also are a publicly traded company. They have had data breaches in 2022, 2023 and 2024. TransUnion uses the VantageScore model, which can range from 300 to 850, and weighs your credit report factors as follows:

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Credit Bureaus Vs. Credit Rating Agencies

Credit bureaus – sometimes known as credit reporting agencies – compile and report consumer behavior to help lenders and businesses make lending and business decisions.

Credit rating agencies assess the creditworthiness of larger entities such as corporations and sovereign nations. The three main credit-rating agencies are Fitch Ratings, Moody’s Corp. and S&P Global.

What Information Do Credit Bureaus Collect?

Let’s get into the different types of information that credit bureaus are compiling.

1. Credit Inquiries

When a company or creditor asks to review your credit report or score because you’ve applied for credit, the bureau will note that as a hard inquiry. If you have multiple hard inquiries in a short period, that can suggest to lenders you’re relying on credit to pay your expenses. This shows other lenders that you recently applied for credit, and it can be a red flag if you have a lot of inquiries in a short time. The effect of a single inquiry is negligible and short-lived. Hard inquiries generally stay on your credit report for up to 2 years. Bureaus often will count multiple inquiries in a short period as a single hard inquiry if it’s clear the borrower is shopping around to get the best financing for a car loan or mortgage.

2. How Long You’ve Had Your Accounts

If you’ve had an open credit account for a long time, it can show creditors you’re experienced at managing debts. On the other hand, a new account can suggest you need more credit to cover your expenses. That’s why opening a new credit line temporarily reduces your credit score. Closed accounts will drop off your credit report over time.

3. Your Credit Limits

Having a lot of available credit shows your lender or credit card company that you’re a responsible borrower, so they’re willing to lend you more. The fact that you have credit you’re not using can suggest that you’re in good financial shape.

4. Your Account Balances

Credit bureaus are also looking to gather information on the amounts that you currently owe. The amount of debt you have makes up 30% of your FICO score. If you already owe a lot, it can suggest you are overextended, and lenders may be more cautious about lending to you.

5. Your Payment History

Your payment history makes up the most significant part of your credit scores. It’s often what lenders look at first. They want to know if you have a habit of paying your bills late or if you make on-time payments with no defaults.

6. Debt Collections

If you are delinquent in paying on an account for too long, lenders will turn the debt over to a collection agency. This can include debts from banks, hospitals, utility companies, retail stores and mobile phone providers. As you can imagine, having debt in collections can imply you’re avoiding debt or unable to repay it. If you have unpaid rent and it’s been reported to a collection agency, it can remain on your credit score for up to 7 years.

7. Bankruptcies

Bankruptcies stay on your credit report for 7 to 10 years, depending on the type you file. This lets lenders know of your past financial trouble. A Chapter 13 bankruptcy will stay on your credit report for up to 7 years, and a Chapter 7 bankruptcy is visible on your credit report for up to 10 years. They don’t affect your credit score for the entire 10 years, but they have a significant impact for the first couple of years.

How Credit Bureaus Get Your Information

You might wonder how credit bureaus get the information they use to compile your credit report. The info is reported by:

Why Do Credit Scores Differ?

Your credit score can vary because credit bureaus gather and weigh information differently and use different credit scoring models. The two main scoring models credit bureaus use are the FICO model – named for its developer, the Fair Isaac Corp. – and the VantageScore model.

The FICO model uses the following factors to calculate your credit score:

VantageScore calculates your score based on these factors:

Your credit score also can vary because not all creditors report to all three bureaus. For example, you might have a car payment at a bank that only reports to TransUnion.

Some lenders, such as those in the auto industry, use industry-specific credit scores. If they only care about specific factors, they may prefer to use an industry-specific credit score instead of an overall credit score.

Do You Need All Three Scores?

Not all lenders look at all three credit scores. It depends on the type of loan you’re applying for and the bank’s preferences. Some lenders may pull all three credit scores and use the middle score as your qualifying credit score. Others may take an average of the three or use the lowest one. Different lenders also each have their own criteria when deciding if a consumer is creditworthy and these scores play a part in that calculation.

Since you don’t know which credit score a lender might use, maximizing your score with all three credit bureaus is important. Since you may not know which credit bureau each of your creditors reports to, maintaining a good payment history and using your credit wisely ensures that you’ll have a solid credit history with all three bureaus.

How Can I Check My Credit Report?

There are both free and fee-based ways to check your credit. It’s free to check your credit report using AnnualCreditReport.com. Every consumer is eligible for a weekly free credit report from each bureau, though this report will not include your credit score.

If you need a copy more frequently or need to see your credit score, you can buy a report directly from each credit bureau. Credit monitoring services also give you access to your credit history for a monthly or annual subscription fee.

Pulling your credit reports at least once a year is important to ensure everything is accurate. Credit bureaus receive information from various sources, and sometimes mistakes happen.

What If I See An Error On My Credit Report?

If you notice incorrect information, you’ll want to correct it as quickly as possible. Here’s how to dispute credit report errors.

Report The Error To The Credit Bureau

Reach out to the credit bureau in writing and include the following information:

It’s a good idea to send the letter via certified mail so you have proof of receipt. The credit bureaus have 30 days to review your request and respond.

Contact The Company That Made The Error

You’ll also want to contact the company that made the error, whether it’s your bank, credit company or landlord. It’s a good idea to contact that entity – known to the credit bureau as a furnisher – in writing via certified mail. They will investigate the dispute and respond within 30 days.

The Bottom Line

Equifax, Experian and TransUnion collect your financial information and report it to lenders and financial institutions. The information managed by the three credit bureaus affects your ability to get credit at a competitive interest rate. It’s important to understand their role, how you can ensure they have the correct information about you, and how to establish a good credit history.

More From Quicken Loans:

• Does Having a Mortgage Help Your Credit Score?
• How To Build Credit: A Complete Guide
• FICO Vs. Credit Score: What’s The Difference?
• What Is A Credit Score?
• What Is Credit History And Why Is It Important?

Sam Hawrylack contributed to the reporting of this article.

Rory Arnold

Rory Arnold is a Los Angeles-based writer who has contributed to a variety of publications, including Quicken Loans, LowerMyBills, Ranker, Earth.com and JerseyDigs. He has also been quoted in The Atlantic. Rory received his Bachelor of Science in Media, Culture and Communication from New York University. He also completed the SoFi/Coursera Fundamentals of Personal Finance Specialization consisting of five courses: Introduction to Personal Finance, Saving Money for the Future, Managing Debt, Fundamentals of Investing, and Risk Management in Personal Finance.

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