What is a credit bureau?

A credit bureau is an agency that collects and sells information about the creditworthiness, or the ability to meet debt obligations, of individuals or companies.

There are two types of credit bureaus, consumer and commercial. Consumer credit bureaus maintain and report on this information for individuals, while commercial credit bureaus collect and distribute this information for businesses.

Many people call the credit bureaus credit reporting agencies or CRA. This is the same thing, and should not be confused as the terms can be used interchangeably.

What does a credit bureau do?

In general, credit bureaus provide information to a number of clients, including merchants that extend credit to consumers and businesses that extend credit to other businesses. They do not provide this information for free, however, those requesting it usually pay a fee, or pay a flat membership charge. Credit bureaus serve as a clearinghouse for credit history information.

So, how do they get the information they provide?

Basically your creditors, also called credit grantors, provide the bureaus with information about how credit customers pay their bills. They will tell the bureau how much you owe, how much you originally owed, if you have any late payments, etc.

Once the credit bureaus get the information from the credit grantors, they then assemble this information into a file on every consumer or business.

This is extremely handy because then, other credit grantors can obtain credit reports about potential customers who wish to open accounts, and can judge from what they see if they are worthy of their credit or not.

Who are the credit bureaus?

Consumer Credit:

Most people hear the term credit reporting agency, or credit bureau and immediately think of one of the three national CRA's. However, the fact is that there are over 1,000 local and regional consumer credit bureaus throughout the United States. The reason we associate the term with only three agencies is that most of the local and regional ones are either owned or are under contract with one of the nation's three major consumer credit reporting agencies: Trans Union, Equifax, and Experian.

Commercial credit:

When it comes to commercial credit, the largest player is Dun and Bradstreet Corp. However, with demand rising, there have been several internet based companies that have been created.

Before Credit Bureaus

While it makes sense to have a credit bureau when you think in terms of creditors being able to quickly and easily judge your credit worthiness, they have not been around forever. In fact, the industry did not really emerge until after WW1.

Before these bureaus were set up, you could really only get credit through people you knew, because they based your worthiness off of what they knew personally.

In the beginning, credit bureaus were more like a place for merchants to check and see if you were a risk. If you have proven to be a risk previously your name was put on a list, and merchants would no longer give you credit. However, after WW1, the industry expanded. With the new information age, that expansion has become easier, and credit bureaus are used for almost everything.

Credit Bureaus Today

The three major consumer credit bureaus in the U.S. today are a part of an international trade association founded back in 1906-the Associated Credit Bureaus, Inc. This association is important because if you are a part of it, you are provided with some invaluable resources. For example, it helps with fraud prevention, a huge problem in our world today. It provides risk management products for consumer merchants so that they do not lend money to the wrong people. It provides credit and mortgage reports, so that you can judge credit worthiness. It also has several other nifty services such as tenant and employment screening services, check fraud and verification services, and collection services. It is a big deal, and so, pretty much all of the credit reporting agencies, big and small are members, and take advantage of these services, including the three major bureaus most of us are aware of.

Our credit bureaus are even more important today than they ever were. Credit is becoming more widely used than any other payment form. In fact, over one billion credit cards are used in the United States each year. So, being able to keep track of people's credit worthiness is fairly important, as is evidenced by the fact that over a billion credit reports are issued annually to various merchants.


Thank goodness we have the technology we have today because basically, your credit is on a huge virtual database, creditors, or credit grantors enter data in about your payment history every month. Each of the three major consumer credit reporting systems-Equifax, Experian, and Trans Union-maintains 190 million credit files, which are used by independent credit reporting agencies across the United States.

Today you are given a three digit credit score which is used to rank how worthy you are of receiving credit, and how likely you are to pay back the loan. You can check your report online, you can get advice on how to improve your credit and your score online as well. The best place to go is www.annualcreditreport.com

A look at the three major credit bureaus and how to contact them:

You can find the contact information for all three national credit bureaus in the United States on the Federal Trade Commission website, or you can contact them directly.

Equifax:

Equifax has many clients as they serve the financial services, retail, credit card, telecommunications/utilities, transportation, information technology, and health care industries, as well as government.

They have global operations including consumer and commercial credit information services. Other services offered include: payment services, software, modeling, analytics, consulting and direct-to-consumer services.

In addition to that, Equifax provides services and systems that help grant credit, authorize and process credit card and check transactions, manage receivables, authenticate, identify and manage digital certificates, predict consumer behavior, market products, and manage risk.

Equifax serves the U.S., Chile, Argentina, U.K., Spain, Portugal, Canada, Peru, El Salvador, and Brazil.

Equifax contact info:

One of the best ways to find information about Equifax is to visit their website. The website is www.equifax.com

You can call them as well, one of the best ways to contact Equifax if you want to order your report for free, call: 800-685-1111

If you need to write to Equifax for one reason or another, you would write to: P.O. Box 740241, Atlanta, GA 30374-0241

The above mentioned contact information is mostly for requesting a credit report. However, if your identity has been stolen, or to report fraud, call: 800-525-6285/ TDD: 800-255-0056 or, actually in many cases, and write: P.O. Box 740241, Atlanta, GA 30374-0241

Experian:

Experian tries to help its clients to find the right customers. They also want to help clients manage existing customer relationships, and find or recognize opportunities for profit and growth.

Experian is more web-based than the other credit bureaus, and it is through its Web-based products and services, that Experian has the ability to enable clients to conduct secure and profitable e-business.

Experian is a subsidiary of The Great Universal Stores PLC and has headquarters in Nottingham, U.K., and Orange, California. Its 12,000 employees support clients in over 50 countries.

Experian contact information:

Visit them online at www.experian.com

To order your report, call: 888-EXPERIAN (397-3742) or write: P.O. Box 2104, Allen, TX 75013

To report fraud, call: 888-EXPERIAN (397-3742)/ TDD: 800-972-0322 and write: P.O. Box 9532, Allen, TX 75013

Trans Union:

Trans Union is a great source for credit information, but also offers a great service risk and portfolio management.

They serve a broad range of industries that routinely evaluate credit risk or verify information about their customers, which includes financial and banking services, insurance agencies, retailers, collection agencies, communication and energy companies, and hospitals.

Trans Union operates nationwide through a network of offices and independent credit bureaus. They have many subsidiaries and divisions in the U.S. and abroad.