Types of Credit Bureaus

Borrowers often focus on the major national credit bureaus, but the lesser known credit agencies can be more important, especially to new borrowers, and just as respected. Because of the dominance of the major bureaus, however, it is almost always better to have a file with them. Closely related to credit bureaus are consumer reporting agencies, which control other aspects of your financial life.

The Big Three

The big three national credit bureaus -- Equifax, Experian and TransUnion -- are in a class of their own."National" bureaus are not government entities, just the only bureaus that serve lenders across the U.S. As of 2011, almost all lenders that use consumer credit reports purchase files from these agencies. The bureaus have an up-and-coming competitor in Innovis, but as of 2011 this bureau does not sell reports to consumers and focuses almost solely on selling histories to lenders to mail "pre-approved" credit offers and mortgage reporting.

Alternative Agencies

Agencies other than the "big three" are called alternative credit bureaus. These bureaus report data not normally picked up by the national bureaus, such as rent payments. Most alternative agencies are not widely know, so lenders do not always accept their reports in lieu of one from the national bureaus. However, 50 million people in the U.S. have no file with the major bureaus, so alternative bureaus will probably become more important in the future, according to "USA Today." Fair Isaac, maker of the dominant scoring algorithm in the U.S. already incorporates data from on alternative agency -- PRBC -- into its scores.

Local Bureaus

Local bureaus across the U.S. began consolidating in the 1970s and 1980s, which is why the U.S. has only three bureaus. The U.S. still has some local credit bureaus, but most of them have some affiliation with at least one of the national agencies. Some local bureaus are nonprofits used to serve the credit reporting needs of a community.

Other Consumer Reporting Agencies

A few other consumer reporting agencies exist that focus on financial reporting other than credit histories. ChexSystem, for example, tracks consumer banking history. Central Credit Services serves the casino credit line sector. Dozens of local bureaus across the U.S. report rental data to landlords. These companies do not fall under the federal Fair Credit Reporting Act, but they might give a free report if you ask.