Three Major Consumer Credit Reporting Companies - Who Are They?

Reader Question: In my research, I have read a lot about the three major credit reporting companies and agencies. I am confused about who these companies are. I also see them referred to as bureaus and agencies. Is this all the same? Are they part of government? Any clarity you can provide is much appreciated.

First off, thanks for expressing your appreciation. You'd be surprised by how rarely we get a "thanks" sent in with questions. It's refreshing to encounter a reader with manners! :-)

Now, on to the question at hand...

I can understand your confusion, because the three major credit-reporting agencies go by many names. I have seen them referred to as bureaus, agencies, networks, entities, and a whole slew of acronyms. So let me simplify this for you. There are currently three companies that maintain credit data on consumers in this country. They are TransUnion, Equifax and Experian (the latter used to called TRW, by the way). Regardless of what people call them, these are the three credit reporting companies being referred to.

That answers part of your question. Now for the second part. No, these organizations are not part of the federal government. They are private-sector companies.

You might wonder why such companies should have the right to collect and sell consumer credit data for a profit (and a big profit at that). You would not be alone in wondering this. I have yet to encounter a reasonable explanation for this, but that's another blog post entirely.

Here is how the three major credit-reporting companies describe themselves, according to the "About Us" sections of their individual websites:

• Experian -- "A global leader in consumer and business credit reporting and marketing services." -Source
• TransUnion -- "A global leader in credit and information management." -Source
• Equifax -- "A global leader in information solutions, we leverage one of the largest sources of consumer and commercial data..." -Source

So there you have it, in their own words. How can we have so many global leaders in a given field? Good question, but also the subject of another blog post. :-)

What Do the Credit Reporting Companies Do?

As the title implies, these three companies collect credit-related data on consumers and report it to lenders, creditors, auto dealers and the like (basically, anyone who is authorized to do a "credit check" on a consumer). This is their primary customer base of the credit reporting companies -- the financial institutions that request credit information on potential buyers and borrowers.

These three organizations are also indirectly responsible for your credit score, because those scores are based on data that comes from the reports these companies produce. Of course, your actions influence all of this data, but it's the three major consumer credit companies that collect the information it, process it, and run it through a scoring model to produce a final score. This is why you have three credit reports, as well as three (possibly different) scores.