Why Are There Three Credit Bureaus?
May 15th, 2009, Written By: Kerri Randall
So you’ve learned the importance of knowing your credit score and checking it on a regular basis. You start to look into it only to find…there are three different credit bureaus. They are Experian, Equifax, and TransUnion. Your score and history are different with all of them. What’s going on?
Imagine a time when small mom-and-pop stores stood on every corner in your town. As time passed, they were bought out or put out of business by the larger corporations. In a sense, this is what happened with credit bureaus. There used to be local bureaus that would track and report your credit information. Over the last couple of decades, the bigger three expanded and took over. Smaller bureaus do still exist, but their information is still supplied by the same three large ones.
The benefit for you is that no matter where you go in the country, your credit history will follow you. That high score and great track record you have will not disappear and there will be no starting over. The downfall is that no matter where you go in the country, your credit history will follow you! If you’ve been irresponsible with your credit and have a low score or any black marks, moving to a different state will not erase any of it. You’ll still need to do some work to improve your score.
It is important to know that Experian, Equifax, and TransUnion are competitors, and they do not share information. This is why your score and your history may look different with each of them. When you apply for any type of credit, the lender will usually only send an inquiry to one of the bureaus, so that mark (known as a “hard inquiry”) will only show on that bureau’s report. Even once you’ve been approved for credit and the creditor begins reporting to the bureaus every month, they are not required to report to all three. And even if they do, depending on when you check your history, the information may still be different because one bureau or another has not received the report or actually bothered to run it yet.
You can request reports from all three bureaus for free once a year from annualcreditreport.com. You will not see your exact score in this free report, but you will find the list of accounts that each bureau has on their records along with your specific history. Be sure to examine them carefully to catch any errors or discrepancies and take steps to resolve them immediately.
Categories: Free Credit Score Reports
