How Does Equifax Obtain its Information?

Equifax is one of three national credit bureaus that control almost all consumer credit reporting in the U.S. It obtains much of its information from you and your lenders. The other major credit agencies also operate this way. Sometimes, the location of Equifax's headquarters leads to it obtaining less -- or more -- information than its competitors.

Identification

Equifax obtains information from your creditors, such as traditional banks, department stores and collection agencies. It also scours public records for judgments that indicate you failed to pay back a debt, such as a wage garnishment order. Creditors report any information you claim on a credit application, even demographic data, so technically some information comes from you, the consumer.

Regional Dominance

The major credit bureaus formed in different parts of the country and operated only in their region until the local bureaus began consolidating in the late 1970s and 1980s. Thus the major agencies tend to have better connections to customer data in the regions in which they historically operated. Equifax started in Atlanta, Georgia, so it receives more information from creditors in the southern and eastern parts of the U.S.

Credit Report Disputes

Consumers have the right to correct mistakes in their credit files under the Fair Credit Reporting Act. This includes demographic data, such as past employers, addresses and telephone numbers. Customers can also give Equifax information to correct errors by a creditor or dispute items they think Equifax wrongly reports, such as a collection account they do not owe.

Tip

Lenders must subscribe to Equifax's reporting service to give the company data. The cost of the subscription and complying with regulation prohibits some creditors, especially smaller ones, from using this service. Credit reporting service companies arose to allow small-time lenders to report payment histories. A credit reporting service company acts as a proxy for creditors, helping them put data in a format the credit bureaus accept.