What Are the Three Main Credit Bureaus?

Credit bureaus collect data about people and companies regarding how well they pay their bills. The credit reporting concept started in the mid-1800s but was a very local process and functioned as more of a warning against lending money or selling goods on credit to individuals who had a history of not paying in a timely manner. However, around World War I, people were able to move more easily and the need for national reporting agencies started to be come apparent. Today, the three main credit bureaus are Experian, Equifax and TransUnion. Though there are numerous smaller regional credit bureaus, most of them are associated with one of the three larger bureaus.

Equifax

Equifax is the oldest of the main credit bureaus; it started in 1899 under the name Retail Credit Company. The name was changed to Equifax in 1975. Equifax started out as a local company in Georgia but saw the potential for a national service. The company was the motivation for increasing regulation of the credit reporting industry in the 1960s and 1970s because of its willingness to freely distribute information about consumers. Today, Equifax is the largest of the three main credit bureaus.

TransUnion

TransUnion was opened in 1969 as part of the Union Tank Car Company. It started its credit reporting business in earnest when it acquired the Credit Bureau of Cook County that same year. The company continued to expand and by 1988 the company covered the entire United States. As of 2009, the company was active in 25 countries.

Experian

Experian was founded in England in 1980 as part of CCN Systems. The company became a national credit bureau in the United States in 1996 when it purchased TRW Information Systems. As of 2009, Experian has branches in 38 companies and clients in 65 countries.

Other Services

In addition to providing credit reports and scores for individuals, the three main credit bureaus also offer credit information about businesses. This service is particularly useful for companies that engage in business-to-business transactions because it helps them to determine which companies it can afford to sell to on credit. They also offer consulting services to help companies come up with better billing methods to ensure on-time payments.

Consumer Rights

Credit reporting used to be a tightly held secret among credit agencies because they feared that if consumers could see their credit reports and their scores they would know how they were judged and would be able to modify their behavior just to improve their scores, which could defeat the value of the scoring system. Though the formula for calculating credit scores is still a closely guarded secret, federal laws require that the three credit bureaus give a free credit report to consumers once each year.