Credit Bureaus And What They Do With Your Credit

Learning what a credit bureau is can help you understand your credit score in general. While there are dozens of credit bureaus in the United States, there are three main credit bureaus that you should be concerned about: Equifax EFX, Experian EXPGF and TransUnion TRU. These three companies will gather and store data about you, your financial accounts, and your overall credit history. These credit reporting agencies are an essential part of your financial health.

Here is what you need to know about credit bureaus and what they do with your credit score.

What Is A Credit Bureau?

In general, credit bureaus will keep track of all your financial details from the moment you first open a credit account. Your repayment history, available credit, credit that you used, debt collections, tax liens, bankruptcy, foreclosure and repossession.

Not only are the credit bureaus monitoring your credit, but they're also keeping track of non-credit related data, like your current and past addresses, employers, salary information and date of birth. While these details do not affect your credit score, businesses will still use it as a way to verify your identity.

What Does A Credit Bureau Do?

The data that the credit bureau collects on you will be used to generate your credit score and report. That report is utilized by lenders who issue credit cards, loans and other lines of credits. Once a year, you can request the report from the bureaus for free.

How Does The Credit Bureau Get My Information?

Many sources provide the credit bureau with the data they need to calculate your credit score. Some creditors, like banks and credit card issuers, will report some of the information to the bureaus. Another way is through bureaus buying or collecting the information.

The bureaus might be able to purchase public records from a source like LexisNexis, or even another credit bureau. Under certain circumstances, the bureaus have to share the data, even though they are competitors with one another. One example of this is when you place a fraud alert with one of the bureaus, the other two major bureaus must also be notified.

Why Is My Credit Score Different At Each Bureau?

When you start to look at your credit score closely from each bureau, you might notice a few discrepancies. There could be several reasons for those differences.

One reason might be because not all creditors are obligated to report all the information to the bureaus. Some lenders might choose to report your account to only one of the three major credit bureaus, or none at all. That would mean that your credit score could fluctuate, depending on what accounts have been released to that bureau.

There are many different credit bureaus, but understanding what they do and what they report on you can help you understand your credit history better.