Top 3 Credit Reporting Agencies: What You Need to Know
Written by
Joseph Hostetler
Edited by
Emily Gadd
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The three major credit bureaus are Experian, TransUnion and Equifax. Lenders report your activity, typically once per month, to the bureaus (whether you pay on time, how much debt you’re holding, the average age of your accounts, etc.).
Your credit health depends on the accuracy of each lender’s reporting, so it’s important to keep an eye on your credit report to ensure it’s accurate.
How Do Credit Bureaus Actually Work?
These three credit bureaus all exist for the same purpose — to collect information on credit users and businesses regarding their abilities to pay back loans.
The bureaus also offer a wide range of financial services and products, including ID theft protection, credit monitoring, credit reports and credit scores. They also serve entities like mortgage brokers, auto dealers and debt collectors by passing along your info when apply to open a new line of credit.
Comparing the Top 3 Credit Reporting Agencies
While these three main credit reporting agencies all exist for the same purpose, they do have some differences.
| Feature | Equifax | Experian | TransUnion |
|---|---|---|---|
| Report Style | Highly detailed | Extensive and frequently updated | Clear and easy to navigate |
| Special Features | Solid monitoring tools | Experian Boost for extra credit | Easy-to-use consumer resources |
| Credit Score Updates | Unique scoring model | Regular and frequent updates | Steady and reliable updates |
Equifax: The Comprehensive Tracker
Equifax is headquartered in Atlanta, Georgia. In terms of size, it’s the second biggest of the main credit reporting agencies. This is perhaps the most “vanilla” credit bureau, as it doesn’t do many things better than the others. Still, it offers perks like:
- The ability to freeze your credit with the push of a button on its website or in-app
- A free monthly credit score and Equifax credit report
- Up to $500,000 in identity theft insurance for premium users
- Various fraud alerts, identity restoration and dark web monitoring for premium users
Experian: Innovative and Detailed
Experian is headquartered in Dublin, Ireland. It’s the largest U.S. credit bureau — meaning it’s pulled more than any other credit reporting agency when a lender is considering you for a loan.
Experian comes with many of the same features as Equifax; you’ll get free credit score tracking and credit monitoring, instant credit freezes, etc., with premium members getting advanced identity theft monitoring. But you can also get three-bureau credit monitoring and alerts. Experian even has a family plan that allows you to monitor up to 10 children at once.
The credit bureau’s big claim to fame is its unique “Experian Boost” tool, which adjusts your credit score based on activity beyond “traditional” credit. For example, on-time payments for your rent, utility bills and even Hulu can help to improve your credit score.
Considering Experian is the most frequented credit bureau by financial institutions, this can help you get better offers from your credit.
TransUnion: User-Friendly and Straightforward
TransUnion is based in Chicago, Illinois. It’s the smallest of the credit bureaus, but its information is no less accurate.
You can expect all the standard features offered by Equifax and Experian, like credit freezes, fraud alerts, credit score trends and the ability to intuitively dispute items on your credit report.
Premium members get fraud resolution support and up to $2 million in identity theft insurance.
Depending on your plan, you can also benefit from medical identification protection, three-bureau credit monitoring and monitoring of the sex offender registry and criminal records.
Why Your Credit Report Matters
Your credit report is one of the most important components of your finances. It gives lenders the information they need to decide whether you’re a good candidate for whichever products you’re applying for. They also use this information to send you targeted offers (increased credit card welcome bonuses, preapproval for low interest rates, etc.). And, of course, your credit score is based on the content of your credit report.
All to say, a credit report matters — a lot. So you should check it often (at least once per year) to ensure it’s accurate.
Unsurprisingly, credit reporting data has errors. The Consumer Financial Protection Bureau notes that these are the most common errors found on credit reports:
- Identity errors
- Incorrect reporting of account status
- Data management errors
- Balance errors
You can check your credit report for free at AnnualCreditReport.com, or you can pay to see it whenever you like. You’ll generally know if something is super wonky, though, as your credit score may drop unexpectedly. This can be all the prod you need to give it a look.
FAQ
Here are some common questions and concerns that come up when you look into the major credit bureaus:- What are the three major credit bureaus?
- The three major credit bureaus are Experian, Equifax and TransUnion.
- How do credit bureaus affect my credit score?
- Credit bureaus take the information they receive from lenders concerning your credit-related activity and add it to your credit file. They score your credit health based on this activity.Lenders typically report to the credit bureaus once per month. While all three credit reporting agencies collect the same type of information, your credit score may vary from bureau to bureau. This is because not all creditors report to all three agencies.
- For example, you may have a credit card that reports exclusively to Experian. That means Equifax and TransUnion won't have the same information, so they can't factor it into your credit score.
- Why is it important to monitor my credit report?
- It's important to monitor your credit report because credit bureaus can sometimes make mistakes that can adversely affect your credit and you may be a victim of fraud without the effects being super apparent. In both of these scenarios, you should reach out to the credit bureaus to have your information corrected
- How can I improve my credit score?
- The best way to improve your credit score is by making on-time payments with your current loans. You should also keep your total available credit below 30% (in other words, don't use more than 30% of your credit card limits). Also, avoid opening new credit in rapid succession. Lenders often view this as a red flag that you're scrambling for money.
- What should I do if I find an error on my credit report?
- If you find an error on your credit report, you should contact the credit bureau immediately and dispute the discrepancy. Each bureau offers a way to do this on its website.
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