Credit Bureaus

The truth about the top 3 credit bureaus

The internet has a lot of content about the three major credit bureaus.

When researching the credit bureaus, it’s easy to get overwhelmed. We want to take all the information about the credit reporting agencies and condense it into one understandable article.

So let’s start at the very beginning.

What is a credit bureau?

This is Google’s definition. But we can simplify this even further. 

A credit bureau is anyone who collects and distributes information regarding credit. 

ANYONE who acts like a credit bureau IS a credit bureau under the law. The law holds all collectors/distributors of credit information to the same standard.

While this applies to a number of credit monitoring agencies, there are three main bureaus: TransUnion, Equifax, and Experian. 

Where did the bureaus come from?

The concept of a bureau has been around since the 1800’s. When a new family would move into town, a group of people would come to greet them. This group, called a Welcome Wagon, welcomed newcomers into the community.

Well, welcoming the newcomers was one purpose. The second was to find out about the new family. Who were they? Can the community trust them? What will they contribute to the community?

The Welcome Wagon would then take the information gathered and spread it to the rest of the town. This informed everyone in town about the new arrivals. 

In its most basic form, this is what a bureau is. It is an organization that collects information about people and conveys it to the rest of the community. Credit monitoring agencies do this on a massive scale.

The agencies collect information regarding our credit and payment history, debt-to-credit ratio, utilization, etc. The credit agencies pass this information along to lenders, credit modelers, etc. These agencies use the information to determine your creditworthiness.

How many credit bureaus are there?

In short – a lot. The real question is: how many should you care about?

For personal credit, there are three major bureaus that you need to focus on.

  1. Experian
  2. Equifax
  3. TransUnion

These three credit bureaus are huge, and it is their information that you view when you check your credit. These agencies employ thousands of people to process all the credit information that they receive.

They also handle the credit information for millions of consumers. 

Most consumers know about the big three bureaus. However, a few other bureaus exist that are not well known and are rarely used, but they are worth mentioning.

  • ChexSystems
  • Certegy Check Services
  • Innovis

Who owns the bureaus?

Private organizations own the credit bureaus. Many consumers mistake these for-profit businesses as government entities.

As Lexington Law explains, these bureaus are not a part of the government, though that is a common misconception.

While the bureaus are not part of the government, the government does control them. The government establishes laws that regulate the bureaus. They also form agencies to monitor the bureaus’ activities.

The role of the government is to protect the citizens from the actions of others. The government has a legitimate interest in protecting people’s personal information. Because the bureaus are so influential, the government takes regulating them very seriously.

There are laws in place to protect the consumer, and there are laws in place that protect the bureaus. These laws are often a double-edged sword.

On the one hand, the laws force the bureaus to jump through many hoops in order to meet all of the requirements.

For example, the bureaus received thousands of disputes. The bureaus must respond to all disputes within 45 days. If no response is given, the bureau must remove the disputed information. Sounds great for a consumer, right?

However, these laws also make it impossible for any other organization to break into the industry. This automatically forms a monopoly – or tri-opoly if you will, in the market. 

So which laws actually regulate the credit bureaus?

There are many different Acts, Rules, and Laws that regulate the Bureaus. Here is a comprehensive list:

The Fair Credit Reporting Act (FCRA):


In essence, this Act is in place to enforce the accuracy of the information that the bureaus maintain. If a creditor sends information to a bureau, that creditor is responsible for ensuring that the information is correct.

Section 607 of the Act dictates that the bureaus must investigate any notice of inaccurate information if they receive it. This is important for you as a consumer because it provides you with a way to dispute inaccurate information. 

Equal Credit Opportunity Act (ECOA): 

The ECOA ensures that everyone has an equal opportunity to obtain loans and credit cards from financial institutions by prohibiting discriminations on the basis of race, color, religion, nationality, sex, martial status, age, etc.

Consumers of all backgrounds have equal opportunity for being approved for loans and credit cards through this Act.

Fair Debt Collection Practice Act (FDCPA):

This Act establishes protection from abusive debt collection practices. This Act regulates everything from the number of phone calls that can be made, to the way that information can be shared between collectors. 

Additionally, this Act requires that collection agencies cease their collection activities if the consumer is disputing the inaccurate debt. Furthermore, the bureaus must stop reporting the collection notice or they will be liable to the FDCPA.

If you’ve ever had a collection, you know that the collection agencies can be incredibly pushy. However, the FDCPA greatly limits the actions that a collector can take against you as a consumer.

Truth in Lending Act (TILA):

Credit companies must disclose the terms and cost of all loans and credit due to this Act. This information is completely disclosed in a standardized way, protecting the consumer from inaccurate and unfair credit practices.

This ensures that you as a consumer have full knowledge of the terms of the line of credit that you are accepting. You can to know the interest rate and expected payments up front. This gives you the opportunity to refuse the credit if you desire.

Fair Credit Billing Act (FCBA):

The FCBA provides consumers with a 60 day period to dispute a charge with a credit issuer. A consumer can dispute a charge if it is inaccurate or unauthorized. This protects consumers from unfair billing practices and provides a way to address billing issues.

If you’ve ever had credit card fraud and disputed the charges, then you can thank this Act. Identify fraud is an unfortunately common occurrence, and fraudulent charges are the main form of identity fraud. Fraudulent charges affected almost 4.92 million people in 2016.

The FCBA enables consumers, like you, to dispute unauthorized or inaccurate charges. This helps consumers remove expensive inaccuracies, thus saving money and their credit.

Credit Repair Organization Act (CROA):

Protecting consumers from credit repair companies, this Act aims to stop credit repair organizations from abusive business practices, like false advertising.

This law protects consumers like you from undue hardships that could result from the financial institutions unfair practices. It forces financial institutions to provide all information necessary to the consumer, ensuring that the consumer can make an informed decision.

So where do you fit into the picture?

Great! Now you know how the credit bureaus work and how they are regulated! But so what? What does that mean for you?

Your interaction with the bureaus begins when they first get your information. There are a couple ways that this can happen.

  • Typically, the bureaus get your information when you apply for loans or credit cards from major banks. When the banks pull your credit report, they draw from the bureaus, which automatically creates a file with the bureau, if one doesn’t exist already. 
  • The bureaus receive information from authorized users when they are added to a line of credit. When you are added as an authorized user to someone else’s credit card, your information is provided to the bureaus.

    You are not responsible for the line of credit, but it is linked to your credit file. This can result in a file being created with the bureau, if one didn’t exist already.

Is your information safe with the bureaus?

The Short answer is yes, probably. But as with all electronic information, there are ways to hack the bureaus’ systems to access your information.

You have likely heard about the credit bureaus databases being breached. The most recent example of this was with the credit reporting agency Equifax. In 2017, Equifax was hacked and 147 million people had their information compromised.

While this was an egregious breach, the percentage of Equifax consumers that were actually impacted was only around 16%. Out of the 900 million people that use Equifax, only 16% had their data compromised. This is still a bad security breach, even though a small percentage of users were actually impacted.

Again, any information that you have online can be hacked and accessed, including your credit information. The real question is “how likely is it for that to happen?”. Statistically speaking, your information is safe with the credit agencies. 


What do the credit bureaus do for me?

The credit bureaus, while a hassle, do provide consumers with a few benefits. 

Credit Reports:

Each bureau provides the consumer with a credit report. This report shows the consumer the information that lenders reported to the credit bureaus.

It is important to know what is on your credit report, especially if you are looking to apply for new credit. One of the main reasons that consumers have low credit scores is due to inaccurate information on the report. If you fix this information prior to applying for credit, it can help you get approved for your goals or get better interest rates on them!

 Credit scores:

The credit reporting agencies provide consumers with some credit scores – more or less. But let’s clarify a couple of common misunderstandings.

1.) Lenders do NOT view the credit scores that the bureaus provide.

2.) These are not your official FICO scores or Vantage scores. They are something else entirely.

The credit bureaus have their own scoring models that do not necessarily reflect a consumer’s creditworthiness. While these fake scores are misleading, they can provide a general sense of one’s creditworthiness.

Through creating accounts with each bureau, a consumer is able to purchase a credit report and view the credit scores. There are other credit monitoring websites that offer a free credit report. The most common sites are Credit Karma, Experian, and Annual Credit Report.com.

Side note: Online score simulators are a great estimate of your worthiness. However, these scores change frequently and are different than what a lender sees. Rather than focusing on the credit score, you should focus on the the content of the credit report.

Direct Products:

Many bureaus offer additional products like identity-theft protection, credit support, or pre-approval for credit cards. These benefits differ between organizations, but they can be beneficial for the consumer.

However, it should be noted that these products are not necessarily linked to a lender, so they provide little, if any, benefit for those seeking to apply for new credit.

The Credit Bureaus and Your Lender

You don’t need the bureaus, at least, not directly. However, any lender that you go to will use the information from the bureaus to view your credit file.

When you apply for new credit, the lender asks for your information – usually your name, birthdate, and SSN. The lender uses this information to pull your credit file, which they review to determine if you are worthy of an offer.

Lenders cannot pull your credit report unless they have permissible purpose under Section 604 of the Fair Credit Reporting Act. However, consumers themselves do not have permissible purpose, so they can’t access their own credit reports! Seems a little backwards, doesn’t it?

Further, the lenders cannot provide a copy of the credit report to the consumer, they can only provide the credit score.

Even if you can’t view the exact report, you do have access to similar reports through other sources. So then the question is, which source do the lenders use?

Some lenders draw from one bureau, while others look at reports and take averages across all three bureaus. Some lenders use FICO scores, while others use Vantage scores. It all depends on the lender.

Is the information accurate?

While all information on the credit reports should be accurate, that is definitely not the case. Think about it. The bureaus maintain the credit reports of over 800 million consumers. That’s a lot of data.

And big data leaves room for big errors. 

The FCRA exists because the bureaus’ information is NOT accurate. A study by the FTC found that roughly 25% of consumers have mistakes on their credit reports.

 This Act holds the bureaus accountable for the information that they manage, and it provides a way for the consumer to correct inaccurate information.  In the FTC study, 4 out of 5 consumers who submitted disputes experienced modifications to their credit reports. 

But does it matter that the data isn’t accurate? Not really. For most people, the errors on a credit report will have no impact on where or not they will get approved. However, some consumers have incorrect late payments, collections, or high utilization, which can have an impact on the way that the lender views them. 

What can you do about inaccurate information?

Since mistakes is common, there are a few ways to address the issues.

  1. Submit a dispute: It all starts with you reviewing your credit report. If you find an issue, then contact the bureau to submit a dispute. Most bureaus are required by law to address the dispute within 45 days.
  2. Challenge the Lender: If this doesn’t work, then you go directly to your lender and challenge them. Usually this step only helps when the lender is the one reporting incorrect information to the bureaus. 

    Section 609 requires that lenders only report accurate information. The Act requires the lender to address any issues that are brought to it’s attention. 
  3. Sue: Let’s say that you submit a dispute or challenge a lender, but the lenders/bureaus made no adjustments to your reports. The next step would be to sue the organization that kept the incorrect information.

    However, this is an incredibly long and expensive process, so the benefits usually don’t outweigh the negatives.
  4. Move on with your life: Usually the incorrect information isn’t harmful, so it is sometimes better to just move on. If it’s not hurting you, then there is little reason to jump through all of the hoops to address the issue.

Contacting the bureaus

We said earlier that it all starts with contacting the bureaus. So how do you go about doing that? 

It is incredibly hard to find direct contact information for any of the bureaus – and this is intentional.  The bureaus would rather you submit an inquiry or dispute through their system than talk to you directly. 

To further complicate matters, the bureaus are constantly changing their contact information to make it more difficult for consumers to find the contact information.

But we found it for you! The contact information for the bureaus is below. This information was accurate as of the time this article was written.

  1. TransUnion: Official Customer Service Number: 1-800-916-8800
    Alternative Contact Number: 800-813-5604
  2. Equifax: Official customer service number: 1-800-846-5279
    Alternative Contact Number: 866-640-2273
  3. Experian: Official Customer Service Number: 1-888-397-3742
    Alternative Contact Number: 1-866-617-1894

So what? 

There’s a lot of information on this page, but how does it apply to you? 

Here’s a quick summary of everything you just read:

The Bureaus exist.
The government regulates the bureaus.
The bureaus gather and disperse your credit information.
There are ways to correct incorrect information on your credit reports.

Clearly, there is a sea of information that is easy to get lost in. But for the majority of people, it doesn’t really matter.

What does matter is focusing on achieving your goal, and seeking help if you need it.