JUL 10, 2012
Youre probably aware that there are three major credit bureaus, including our parent company, Experian. But do you know what they do ”and dont do? Do you know how theyre the same, and how they differ?
The most important credit bureau information you should know is that there are many organizations that compile credit information about consumers. None are government affiliated or sponsored. The three largest, however, are the most well known and commonly used by creditors when evaluating a consumers creditworthiness.
The big three often cooperate with each other in ways intended to benefit the consumers. For example, if youre the victim of fraud and you initiate a fraud alert with one of the major credit bureaus, federal law requires that bureau to share the alert with the other two. The major bureaus also try to maintain consistent practices and use the same basic criteria to calculate credit scores in order to make scoring as easy to understand and consistent as possible.
Still, the scoring models differ slightly, and so your credit score could differ
from bureau to bureau. To get a true picture of your credit status, its always a good idea to look at your reports and scores from all three major bureaus. The top companies jointly maintain a website that allows you to access a free annual credit report from each once a year.
Its also important to understand that while credit bureaus generate credit scores based on information collected about each individual consumer (including payment history, length of credit history, types of credit used, etc.), they do not actually rate your credit. When a lender or other creditor pays a bureau for your report and score, they have to draw their own conclusions about what that information means in terms of your creditworthiness.
Of course, there are also differences in products and services offered by all three major credit bureaus, and a visit to the website of each will help you understand those differentiators. Generally, competition is perceived as positive for consumers in any industry because it encourages companies to try to win customers with innovation, quality and service.