What is a Credit Bureau?

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Highlights:

  • The three nationwide credit bureaus do not make lending decisions
  • Credit bureaus receive information from your lenders and creditors
  • Regularly reviewing your credit reports is important to ensure your information is accurate and complete

The simplest answer is that credit bureaus, like Equifax, are data collectors. Credit bureaus, also known as credit reporting agencies, do two things:

1. We compile your credit history based on your credit accounts, using your Social Security number or other identification information. 

2. We provide your credit information, in the form of credit reports, to lenders and creditors to help them determine your creditworthiness. We also provide credit reports to you, so you can better understand your credit situation. Your credit history, including factors such as your payment history and your amounts owed, are used along with other factors to calculate your credit scores. 

Do the three nationwide credit bureaus make lending decisions?

A frequent misperception about the three nationwide credit bureaus (Equifax, Experian and TransUnion) is that they make lending decisions. Credit bureaus provide some of the information creditors and lenders use to help them make important lending decisions. While credit bureaus collect credit information in order to make it available to certain third parties, the decision to deny or approve someone credit ultimately lies with the lender or creditor. Each lender and creditor may have its own criteria.

Where do credit bureaus get their information?

Credit bureaus use different sources for collecting information, and not all third parties report to the three major credit bureaus. This means that each of your credit reports may contain different information. Creditors keep the credit bureaus updated with your account status and payment history — two factors that contribute to your credit scores.

Speaking of credit scores, there are many different credit scoring models used by credit bureaus and other entities. As a result, your credit score may vary between the three nationwide credit bureaus — even if all of your creditors report to all three. While many do, some creditors may report to only two, one or none at all. 

What types of information are on credit reports?

Credit bureaus collect the following types of information:

  • Credit account information, including payment history, balance of an account, when the account was opened, date of the last activity, high credit on the account and the credit limit on the account
  • Debt collections
  • Bankruptcies

It's important to note some companies may take these factors and others into consideration when evaluating your application for credit.

Why are each of the three nationwide credit bureaus required to provide you with a free copy of your credit report?

According to The Fair and Accurate Credit Transactions (FACT) Act, you have the right to one free credit report each year from each of the three nationwide credit bureaus. You can get these free credit reports by visiting www.annualcreditreport.com.  You can also create a myEquifax account to get two free Equifax credit reports each year. In addition, you can click "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.

Credit bureaus are also required to provide an additional free credit report in the following instances:

  • You’ve been denied credit or a benefit as a result of information on your credit report within the last 60 days
  • You’re unemployed and seeking employment
  • You're on public assistance
  • You're a victim of identity theft

Why is it important to dispute inaccurate or incomplete information on your credit reports?

Regularly reviewing your credit reports is important for many reasons, including ensuring accuracy of your information. Information that is inaccurate or incomplete may not only impact your credit scores, but could be a sign of potential identity theft. 

If you do find information on your credit reports you believe is inaccurate or incomplete, and it is account-related, consider contacting the lender or creditor with whom the account is associated. In addition, you may file a dispute with the nationwide credit bureau that furnished the credit report where the information is listed. If you find information you believe is inaccurate or incomplete on one credit report, you may want to check credit reports from the other two bureaus. At Equifax, you can create a myEquifax account to file your dispute. Visit our dispute page to learn other ways you can submit a dispute.