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consumer credit reporting

Learning a little about how credit bureaus work can help you understand your credit overall.

The three major consumer credit bureaus are TransUnion®, Equifax® and Experian®. A credit bureau is a company that gathers and stores various types of information about you and your financial accounts and history. They draw on this information to create your credit reports and credit scores.

These three big credit bureaus are often grouped together. But they’re separate companies that compete for the business of creditors, who may use the credit reports and scores from these bureaus to help them make lending decisions. And they’re not the only three bureaus out there, either.

Keep reading to learn how credit bureaus get the information they use to create your reports and scores, and how you can go about contacting them if you think something’s wrong.


What does a credit bureau do?

A credit bureau uses the information it has gathered about you to generate a credit report. The credit bureau may also use the information on your report to calculate a credit score for you.

Your credit reports may be used by creditors, such as a company that issues credit cards, when they’re considering whether they will open a line of credit for you. As a consumer, you can request your credit reports from the bureaus for free once a year.Keep reading: How to build credit from scratch

How do credit bureaus get your information?

The data that the bureaus collect come from a variety of sources:

  1. Information reported to the bureaus by creditors. Creditors, such as banks and credit card issuers, may report information about their accounts and customers to the credit bureaus. In this context, the creditors are known as “data furnishers.”
  2. Information that’s collected or bought by the bureaus. For some types of information, the credit bureaus buy the data. For example, a consumer credit bureau might buy public records information from LexisNexis, another credit bureau, and use this information when generating your credit report. Examples of information that a credit bureau may buy include government tax liens or bankruptcy records.
  3. Information that gets shared among the bureaus. Although they are competitors, sometimes the credit bureaus must share information with one another. For example: When you place an initial fraud alert with one of the bureaus, it’s required to forward the alert to the other two.