Why There Are 3 Different Credit Reports

Almost the entire credit industry is reliant upon three companies to gather information on customers so lenders can rate people as a credit risk. Since these are three separate companies, you also have three different credit reports. This does not preclude other reports on your habits as a consumer, but they are typically the most important.

History

Modern credit reporting goes back to the late 19th century. During this time, credit reporting was a local industry because no company had the reach to have a national database on consumers. However, local credit bureaus began consolidating over the decades. By the 1980s, Equifax, Experian and TransUnion were left as the only major credit bureaus in the U.S. They collect information on their own and even though much of it is the same, the bureaus still sell reports separately.

Other Credit Agencies

The U.S. still has some local credit bureaus left in 2011. Some of these bureaus may exist to report information to the major bureaus or are a subsidiary of them. Alternative credit agencies also pop up from time to time. PRBC, for example, is one of the biggest reporters of payments the major bureaus ignore or cannot verify, such as rental history and utility payments. Alternative agencies only verify what you report, so you do not have a history with them unless you sign up for their service.

Subtle Differences

Your credit reports probably contain redundant data with a few omissions because the bureaus cannot find out about all accounts and they rarely share data. Part of the differences in your credit reports come from the regions that the bureaus dominate. Equifax, for example, originates from Atlanta, so it tends to have more connections in the Southeast and East coast. Missing just one account can make a huge difference in the dominant FICO scoring model.

Considerations

Lenders know that the bureaus sometimes miss accounts, so they usually purchase a consumer's report from all three agencies. Consumers should check reports from all three major agencies too. The bureaus might erroneously list a negative account, so be on the look out for accounts you do own. If you see an error, dispute it with the bureaus as soon as possible.