Credit card agencies, commonly called credit bureaus, are companies that collect data about people’s borrowing history. And they provide that information to lenders, employers and other authorized parties for the purpose of evaluating how responsible we are with money. The big three credit card agencies are Equifax, Experian and TransUnion.
When you have a credit card or loan, its issuer will report information about your account to one or more of the credit agencies each month. Whether or not you pay your bill on time is among the most important things they’ll relay. But credit reports contain lots of other info, too. And credit scores are all based on these files from the major credit card agencies.
Here’s what you need to know about credit card agencies:
- Credit card agencies are often referred to as “credit bureaus” or “consumer reporting agencies.”
- The three most widely used credit agencies are Equifax, Experian and TransUnion.
- If you use credit at any point in your life, whether it’s a credit card or a loan, you will have information on file with the credit agencies. You’ll also have a record if you’ve been an authorized user on a credit card or failed to pay utility bills, taxes and other financial obligations.
- The issuer of any credit card or loan you have will give monthly updates to the agencies. You get credit for on-time payments and other responsible behavior.
- Credit agencies compile their information into credit reports. Lenders, employers, landlords and other authorized parties may access these reports to evaluate your financial responsibility, when necessary.
- The credit agencies do not calculate your credit score. Separate companies, FICO and VantageScore, give you a score based on the information in your credit reports.
It’s important to understand what credit card agencies are and how they operate because they play a big part in your wallet’s life. They’re key to your ability to borrow money, rent an apartment, get a car, save on car insurance and even land a job. So it’s definitely worth checking your credit reports often to make sure they’re accurate. If they’re not, you’ll have to contact the agencies and dispute the incorrect information to get it removed.
You can see your TransUnion credit report for free on WalletHub, updated every day. And each year, you’re entitled to one free copy of your report from each of the three major bureaus at annualcreditreport.com.