Credit Reporting Agencies: Big 3 & Alternative Bureaus

There are nearly 40 credit reporting agencies in the U.S. But just three of these so-called credit bureaus dominate the market: TransUnion, Equifax and Experian.

The big three credit bureaus collect information about how we manage our financial obligations. The bureaus then sell this info to lenders and credit-scoring companies, which use it to help determine eligibility for loans and lines of credit. Employers, car dealers, property management companies and various other decision-makers also use data from the three credit bureaus to evaluate applicants.

You probably know that you can get a free copy of your credit report from each of the three major credit bureaus once every 12 months. You can also get your TransUnion credit report, updated daily, for free on WalletHub. But you shouldn’t stop there.

It’s worth learning a bit more about these companies that already know so much about us. And we’ll start with a quick overview of how to contact each major credit bureau in case you find a mistake on one of your credit reports. Credit-report errors are far too common, after all. And they can wind up costing you money if left unaddressed.

Big 3 Credit Bureaus

Below, you can learn more about the big three credit bureaus as well as the alternative credit bureaus that you may encounter at some point in your credit career.

TransUnion

TransUnion has credit reports for more than 500 million people worldwide. It also has rather humble roots. It was actually formed (in 1968) to be the holding company for Union Tank Car Company, which leased railcars. And TransUnion didn’t get into the credit-reporting business until a year later, when it acquired the Credit Bureau of Cook County.

The Credit Bureau of Cook County was notable for using 400 seven-drawer filing cabinets to store its 3.6 million records. But the company has come a long way since then.

TransUnion now provides data-tracking and analytics services to a wide range of businesses. And it offers credit reports, scores and monitoring services to consumers.

Get Your TransUnion Credit Report

Like Equifax and Experian, TransUnion has been the subject of lawsuits and government penalties relating to its credit-reporting practices over the years. It received a $2.5 million fine from the FTC in 2000 and lost a pair of consumer suits in 2003 and 2006.

TransUnion is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol TRU. Its largest shareholders are Goldman Sachs and Advent International.

Equifax

Equifax focuses on the business-to-business space, selling consumers’ credit and insurance data to financial institutions, government agencies, insurance providers and retail companies. But it has also been selling credit reports, credit scores and credit monitoring to the general public since 1999.

Read Equifax Reviews

Equifax is the oldest of the big three credit bureaus. And the company has faced its fair share of controversy over the years. Some people even allege that it changed its name from Retail Credit Company to Equifax because of bad press.

Media reports in the 1960’s and early 70’s revealed growing concern that the company was collecting information on people’s sex lives, marital strife and political activity. The controversy ultimately led to the passage of the Fair Credit Reporting Act (FCRA) in 1970. And the Retail Credit Company became Experian five years later.

“The basic objective of this act is to protect consumers from inaccurate and obsolete information in credit reports about them and to protect their privacy,” says Emmanuel Roussakis, a professor of finance at Florida International University.

Equifax has since come under scrutiny for violating the FCRA. Along with Experian and TransUnion, Equifax received a $2.5 million fine from the Federal Trade Commission in 2000. It settled an FTC lawsuit for $250,000 in 2003. And in 2013, the company lost an $18.6 million lawsuit stemming from uncorrected errors on an individual’s credit report.

Experian

Experian was created when the now-defunct British retailer GUS acquired TRW Information Services – the largest U.S. credit bureau at the time. Experian has since expanded around the globe, from its Dublin, Ireland corporate headquarters to its operational hubs in England, Brazil and California. The company now employs more than 6,000 people in North America alone.

Experian’s business concentrates on credit, marketing and consumer services as well as analytics. It tracks information on consumers, businesses, insurance, motor vehicles and select lifestyle characteristics.

Read Experian Reviews

Experian has come under fire on both sides of the Atlantic in recent years. In January 2011, The Daily Mail published an article highlighting consumer outrage over the company’s practice of advertising free credit reports only to enroll people in a hard-to-cancel monthly subscription service. FreeCreditReport.com, which is owned by Experian, has drawn similar ire from U.S. consumers.

In addition, a February 2013 60 Minutes piece about the prevalence of errors on American credit reports included interviews from three former Experian employees who alleged that company policies restricted them from fully investigating consumer disputes.

The Big 3 Credit Bureaus’ Credit Scores

TransUnion, Equifax and Experian joined forces in 2006 to create a new type of credit score: the VantageScore. It was designed to compete with the Fair Isaac Corporation’s FICO Scores. And the first model – VantageScore 1.0 – was capable of scoring 15 million more people than other credit scores at the time.

The more-predictive VantageScore 2.0 was introduced in 2012. And VantageScore 3.0 followed in 2013. VantageScore 3.0 adopted the 300 to 850 credit score range and allows up to 35 million more people to get credit scores than competing models. You can check your latest VantageScore 3.0 credit score for free on WalletHub. You can also learn more from our VantageScore and Vantage vs. FICO guides.

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VantageScore 4.0 is coming fall 2017.

Alternative Credit Bureaus

Experian, Equifax and TransUnion aren’t the only credit reporting agencies on the block. There are tens of other companies – big and small – that are active in the space. Most have carved out a niche for themselves, from tracking rent and utility payments to monitoring checking-account management and insurance consumption.

Here’s a quick overview of who the alternative credit bureaus are and what types of information they track:

Financial services companies, employers, landlords, etc., often consider information from these sources when evaluating applicants. After all, the more data that banks and other consumer-facing companies have, the more accurate their analytics and underwriting practices will be.

But they don’t rely on these alternative credit reporting agencies nearly as much as the big three credit bureaus.

Ask the Experts: Reporting on Credit Reporting

To help you learn more about the business of credit reporting and how it impacts daily life, we posed the following questions to a panel of credit experts. You can meet them and check out their responses below.

• What percentage of people do you think can name the big three credit bureaus?
• What is the biggest misconception people have about the credit bureaus?
• Is there anything in particular that distinguishes the three major credit bureaus, or are they pretty much equal?
• Is it important for people to check their reports from non-traditional credit reporting agencies?