The 3 Credit Bureaus. What do they do?
In the United States, there are many credit bureaus, however, the most trusted and popular ones are the TransUnion, Experian and Equifax. They are collectively called as the 'Big Three'.
TransUnion - TransUnion is the 3rd-largest credit bureau in America. It serves around 45,000 businesses and 500 million customers in 33 countries. The credit reports are marketed directly by the company to the consumers. The company is headquartered in Chicago, Illinois.
Experian - Experian is the largest credit bureau in America. It serves around 103 million businesses and 890 million customers all around the world. The company employs about 17,000 people. Experian also markets the credit reports directly to the consumers. It is headquartered in Dublin, Ireland.
Equifax - Equifax is the 2nd-largest credit bureau in America. It is the oldest among the 'Big Three', it was founded in 1899. Headquartered in Atlanta, Georgia, Equifax serves more than 88 million businesses and 800 million consumers worldwide. Just like TransUnion and Experian, Equifax also markets the credit reports directly to the customers.
What the 3 Credit Bureaus Do
TransUnion, Experian and Equifax all collect and maintain the credit information of consumers. They will then sell it to businesses/companies in a credit report form. Banks and other financial institutions are the main customers of these credit bureaus. A bank/financial institution will look at the credit report of an individual or a business from these credit bureaus before approving a loan or a credit card. It does not matter whether it is a short term loan or a payday installment loan or a quick installment loan, the credit report matters. Now, if you default on your credit card payment or loan payment, the banks/financial institutions will report this to the credit bureau. This will be recorded in your credit history.
The information that the credit bureaus collect includes your present credit accounts and all your payment histories with banks/financial institutions. Utility companies and telephone companies also report late/no payments to the credit bureaus. Once they have all the information, the bureaus will compile everything and generate your credit report. Every 12 months, you will be able to download this report free from AnnualCreditReport.com. Now, all the 3 credit bureaus do not share information with each other. They also do not contact each other. Hence, you may find slight variations in each of the credit reports from these 3 companies. If you find your credit report inaccurate, dispute it immediately, and get it corrected as soon as possible.
Positive financial information, such as an impeccable payment history, will remain indefinitely on your credit history. Negative financial information has time limits, it will be removed from your credit history after a certain period of time. For instance, late payments will be removed from the report after 7 years. Bankruptcy can remain on the credit report for 10 years.
It is recommended that you check your credit report occasionally, even if you are not planning on taking any loans or credit cards. This will ensure that your credit report remains error-free.