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Here's What the Three Credit Bureaus Actually Do (And Why You Should Care)

March 30, 2018

All right, so you finally got yourself a job that pays you in more than free swag and occasional loose change. You've decided it's time to move out of your old room at your parents' house and into a place that's more ~you~. Or maybe you're ready for an upgrade to your college pad. (Say goodbye to sharing a bathroom with 7 people!)

Well, congrats! But, before you head off to buy DIY furniture with names you can't pronounce, you're going to have to make your way through the three credit reporting agencies first.


What's a Credit Bureau?

These three major credit reporting agencies, aka credit reporting bureaus, are for-profit private companies who keep track of your credit history and sell this data to businesses in credit reports.

In the US, the three major credit reporting agencies are TransUnion, Experian and Equifax.

Though these are all for-profit companies, the government passed the Fair Credit Reporting Act to regulate how the industry works.

Thanks to this law, you have the right to receive a free credit report from each agency once a year. You can do this by going through a site such as, or you can purchase additional copies at any time directly through one of the companies.

Each agency will provide you with one free credit score per year, with Equifax and Experian offering a 3-agency option allowing you to see all three scores in one place. The decisions being made about your financing options can include up to all three scores so it is important to know each of them.

What do they actually do?

The three agencies all get your credit related information from the companies you come into contact with. That means they'll know if you're opening (or closing) lines of credit and whether or not you are making on time payments. They can also factor in certain public records, such as tax liens, bankruptcies, and repossessions.

Though it will vary by state, public records such as bankruptcies can be especially damaging — in states like California they will stay on your credit history for up to 15 years.

With this credit history, the credit bureaus can then sell the information to any company with a legitimate need to know your credit history. These kinds of companies include credit card companies, lenders, landlords, and even employers, to name a few. They typically use the information in your credit report or your score to make decisions about whether or not to extend credit to you, approve an application to rent, or decide what interest rates to charge you.

What's the difference between the three? Why does it matter?

Even though all three of the companies are pulling data from the same types of sources, chances are you still have three totally different scores. The three companies don't share information with each other, and your creditors might not report to all three.

Since you don't know which bureaus your next creditor will use- they might even use all three- it's important to know each of your scores.

One or more of the agencies could have incorrect, or outdated, information impacting your credit rating. By going over your credit reports, you can find any inaccuracies and dispute them with the reporting agency to improve your score.

I Heard about FICO, What's That?

FICO is the creator of the FICO scoring model, which is an algorithm that calculates an individual's credit score based on the information found in their credit report. FICO scores are widely used by lenders and insurers.

While FICO does produce these predictive risk scoring models, they aren't actually a credit reporting bureau. The information they base your scores off of is dependent on what's in each of your credit reports from the three bureaus. You can find out your FICO score through your credit card provider if they offer it, through sites such as and, or by purchasing it directly through FICO.

FICO scores can be confusing. Your FICO score might look different depending on which bureau's data is used to come up with it. They also have different versions of their scoring model, FICO 8, 9, XD (and more!) just to further complicate things. You can find a more in depth explanation here.

It should be mentioned that the three bureaus created a scoring agency themselves, VantageScore, to rival FICO. The VantageScore uses basically the same criteria as FICO but just weights them differently. For one example — the FICO score grades all late payments the same, but VantageScore has them impact your rating in proportion with how important the payment was.


The three major credit reporting bureaus in the U.S. are TransUnion, Experian, and Equifax.

By pulling data from public records, and directly from your creditors, they create a report of your credit history — which is used to determine your score. Since you can't be sure which of the three agencies a future business will check with, it is important to make sure to be aware of each of your scores and ensure their report is accurate. You can do this by getting one free report each year, either directly through the reporting bureau or online at

Want to start building your score with every rent payment you make? By having your payments reported to all three bureaus (which most landlords typically do not do for you), you can build your credit history every time you pay rent. It's pretty easy once you know how it works.

How to Contact the Three Bureaus to Dispute Claims:

File a Dispute
P.O. Box 740241
Atlanta, GA 30374-0241

File a Dispute
P.O. Box 2104
Allen, TX 75013-0949

File a Dispute
P.O. Box 1000
Chester, PA 19022