If asked, “How many credit bureaus are there in the United States,” most people would answer three: Experian, TransUnion, and Equifax. There may be hundreds of credit-reporting agencies in the U.S. who may be collecting, storing, and disseminating personal financial information.
The number of information gathering companies may be important to consumers concerned about personal privacy, and use of their information. There are five categories of U.S. credit bureaus.
- National consumer-reporting agencies
- National business information companies
- Regional and affiliate bureaus
- Collection agencies
- Medical information bureaus
National Consumer-Reporting Agencies
In addition to the three most prominent consumer-reporting agencies (Experian, Equifax, and TransUnion) there are several other national agencies that may collect, store and disseminate your personal financial information. While the big three dominate the traditional market, other players complete by offering complementary services for lenders.
Innovis is the fourth national U.S. consumer credit bureau. Innovis began life as Associated Credit Bureaus before going through several name changes and ownership changes. Their competitive advantage was a broad file of negative or derogatory information. Today, they offer a range of supporting services: verification, flood zone determination, appraisal services, and more.
Pay Rent Build Credit (PRBC) tracks how consumers manage apartment rentals, gas and electric bills, cell phone and cable bills, and more. It enables consumers with short or thin borrowing histories to open accounts with similar providers. PRBC is the largest national bureau focusing on alternative data. There are many more too numerous to list.
National Business Information Companies
Business information companies may affect your life if you ever decide to start a business, or if you already own one. Banks may check a business report when making a loan, and suppliers often want to see a history of business payments before shipping product on terms.
Dun and Bradstreet is the acknowledged leader in this space. D&B collects third party trade information, utilizes agents to inspect business locations, and interviews business principals.
Credit.net/Infogroup is now the second largest business credit bureau. They recently purchased the business information reporting division from Experian, which had been the number two provider until divesting the business unit after the financial meltdown in 2008.
Regional and Affiliate Bureaus
There may be hundreds of regional and affiliate bureaus. Each of these
organizations is an independently owned and operated business that collects and stores consumer lending information, but disseminates the data through one or more of the three national consumer-reporting agencies: Experian, Equifax, or TransUnion.
A quick history lesson reveals why these companies still exist with so little visibility. Go back into the 1960’s before the advent of the information age. Thousands of local credit bureaus maintained paper-based files collected from lenders in a local community. Lenders would use the local agency it perceived had the most complete borrowing histories for consumers in their local area.
As time went by computing power increased, and the industry began to consolidate, but not completely. The national bureaus now manage the data collection efforts from national lenders, and utilize call center operations to manage mid-size lenders. There still is a need for a local presence to manage the data collection from smaller local lenders.
You may find the hundreds of local credit bureaus that serve a limited geographic area. They may collect data that is shared exclusively with one of the big three – explaining one part of the equation for why credit bureaus have different risk scores .
Many of the regional bureaus have evolved into collection agencies. They began life collecting, storing, and disseminating borrowing information, but as the national companies assumed more of that role, they migrated their business to debt collection.
These agencies now collect past due information from lenders, but now also from medical practitioners. doctor offices, and hospitals. They collect the data from any business that has a receivable, they store these data on their computer systems, and often report the past due balances to the big three consumer-reporting agencies. These data are used to collect the past due balances from debtors.
Many of these collection agencies use their legacy agency name – Credit Bureau of ____________. Substitute the city or state name in the blank line. There are hundreds of these examples.
Medical Information Bureaus
The Medical Information Bureau is a non-profit member organization that collects stores and shares underwriting information for use by health and life insurers. The data are used to determine an individual’s risk when applying for life, health, disability income, long-term care, and critical illness insurance policies.
Posted December 20, 2012 by Kevin Haney