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Key takeaways
- Credit bureaus, including Equifax®, Experian®, and TransUnion®, are companies that collect your credit information to create credit reports.
- Lenders use these reports to check your credit history. The bureaus themselves don’t approve or deny loans.
- You’re entitled to a free credit report from each bureau every year, and it’s helpful to check them for any mistakes.
- If you find an error or suspect fraud, you can dispute it with the bureau or place a freeze on your credit for protection.
Understanding credit bureaus and how they operate will help you confidently navigate topics like building your credit and applying for loans.
Here’s what you need to know about the three credit bureaus and how they work:
What does a credit bureau do?
You may know a lot about how to build and manage your credit, but do you know who the gatekeepers of credit reports are?
Whenever you apply for a loan or line of credit, lenders want to know how risky a borrower you might be. To help them figure that out, they rely on credit bureaus to analyze your borrowing history
Credit bureaus, also called credit reporting agencies, collect and maintain your credit information. They then sell this information to lenders and other businesses.
A credit bureau’s primary function is to give lenders a clear picture of your credit history so they can make informed lending decisions. They can also check public records for things like bankruptcies or tax liens. All of this information is put into a document known as your credit report.
Who are the 3 major credit bureaus?
Experian, Equifax, and TransUnion are the three major credit bureaus in the U.S. While there are others, these are the main three bureaus that lenders use. The information they collect is used to:
- Calculate credit scores
- Help lenders make decisions
- Conduct some pre-employment background checks
- Evaluate lease applications
- Set insurance rates
These three bureaus use FICO® credit scores. They also co-created their own credit score, the VantageScore. Both scores generally range from 300 to 850, but they weigh information differently.
Because of this, and since not all lenders report to all three bureaus, your credit score might be slightly different at each credit bureau.
Quick facts about credit bureaus
Financial services can seem mystifying, but they don’t have to be. Here’s a quick rundown of the top things you need to know about credit bureaus.
1. Credit bureaus don’t make lending decisions
Credit bureaus don’t have any say in whether you’re approved or denied for a loan. They simply collect and organize your credit information for lenders. The lender makes the final call.
2. Credit reports are free
Thanks to the Fair and Accurate Credit Transactions Act, also called FACTA, you can get a free copy of your credit report from each of the three major bureaus once every 12 months.
Equifax, Experian, and TransUnion have voluntarily extended a program that allows you to check your credit report history once a week for free.2
3. Each credit report has unique information
Each of your credit reports might contain slightly different information. That’s because not all creditors report to all three bureaus.
Since the information can vary, checking all three reports can help you make sure you don’t miss any errors.
How to dispute errors on your credit report
Financial records can stay on your credit reports for years. If you find information that is inaccurate or incomplete, you should contact the credit bureau directly to dispute it.
Errors can hurt your credit scores and could even be an indicator of identity theft.
If you think you’re a victim of identity theft, you can ask any of the bureaus to place a fraud alert or a credit freeze on your report.
A credit freeze restricts access to your report, making it harder for someone to open a new account in your name. This service is free, and you can lift the freeze anytime you need to apply for credit.
Take control of your credit information
While credit bureaus don’t have the authority to approve or deny you for a loan, their role as the keepers of credit information is a big deal. Understanding how they work helps you become a more informed borrower. Review your credit reports regularly and get in touch with a bureau right away if something seems off.
For more information about understanding and reviewing your credit information, see our guide on how to read a credit report.
Frequently asked questions
What are the 3 US credit bureaus?
The three major nationwide credit bureaus in the U.S. are Equifax, Experian, and TransUnion.
Do credit bureaus decide if I get a loan?
No, credit bureaus only provide your credit information to lenders. The lenders themselves make the final decision to approve or deny a loan application.
How often can I get a free credit report?
You can actually get a free credit report once a week from the credit bureaus, though this report only includes your credit history. You are legally entitled to one free credit report that includes your credit score from each of the three major bureaus every 12 months through AnnualCreditReport.com.