What is the role of a credit bureau?
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You may have heard about credit bureaus, but you have never stopped to think about what their function is and how familiar they are with your credit, if so, stay and read, because you will find out not only what a credit bureau is, you will also learn about the different credit bureaus, at least, the most known ones.
Credit reporting agencies are companies that collect information about the credit and financial history of individuals (consumers). In other words, if you apply for a loan or credit card, your credit history will influence negatively or positively when a lender has to make a decision about you.
Since this information on your credit report will speak to your credit score, how financially sound you are and of course if you are a good candidate, generally all companies take your credit score into consideration and this will determine whether you are approved or not once you have gone to apply for their service.
If you have taken out a loan or applied for a credit card, your loan information is reported to one of the major credit bureaus. The credit bureaus receive this information from other companies.
These companies send information about the status of their customers’ accounts. The information includes such things as your current account balance, whether or not you pay your bills on time.
There are three credit reporting agencies, at least the best known. These are the ones that are in charge of collecting consumer credit information.
These agencies are TransUnion, Experian and Equifax. The main function of these credit bureaus is to gather information to measure your credit score.
TransUnion:
This credit bureau expanded into credit monitoring, and by 1988, had achieved complete coverage in the U.S. Unlike the other two credit reporting agencies, TransUnion does not track commercial credit scores
Experian:
In existence for more than 125 years and employing 17,800 people in 44 different countries, this company also tracks consumer and business credit reports and offers a credit monitoring service for customers.
Equifax:
This is arguably a global data, analytics and technology company that operates in 24 different countries. This company tracks consumer and business credit reports and offers a credit monitoring and identity theft service.
In 2017, Equifax suffered a data breach that exposed the private information of 147 million people. Crazy, isn’t it? But, that doesn’t stop it from being one of the most well-known credit bureaus.
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