What is the most commonly used credit bureau

Whenever you apply for a loan – or even try to land an apartment or a job – your fate largely rests in the hands of the three major credit reporting agencies.

These agencies collect reams of data about your financial behavior that lenders, landlords, employers and others use as a benchmark when evaluating how well you manage money.

Understanding what these agencies are and how they operate can give you important insights into how to conduct your financial affairs.

What Are the 3 Major Credit Bureaus?

The big three credit reporting agencies collect and maintain data about your financial life that is contained in your credit report. These agencies are:

• Equifax. Equifax has a team of employees that is 13,000-people strong, with workers in 24 countries across the globe. The company, headquartered in Atlanta, has roots stretching back more than 100 years.
• Experian. Based in Costa Mesa, California, Experian offers data and analytical tools to businesses in more than 65 countries.
• TransUnion. Based in Chicago, TransUnion's operations can be found in more than 30 countries. It has a consumer credit database of 1 billion customers and a global customer base of more than 65,000 businesses.

In truth, the three credit reporting agencies are more alike than they are different. According to myFICO, these agencies all collect roughly the same data, with only minor differences. They use this data to assign you a credit score. For that reason, your credit score should be reasonably similar across all three agencies.

What Information Do Credit Bureaus Collect?

Equifax, Experian and TransUnion each keep a credit report on you that highlights key information about your financial behavior. Each major credit bureau uses this information to determine your credit score.

But what do your reports contain? Your day-to-day financial activity makes up the bulk of your credit report. If you apply for a credit card, loan or line of credit, the lender likely will alert one or more of these agencies. That information will then appear in your report.

Other information that may appear in your credit report includes:

• Credit card and loan balances.
• History of payments on credit cards and loans.
• Number and type of accounts.
• Bankruptcy filings.

Most big lenders report to all three credit bureaus, says John Ulzheimer, a credit expert who has worked at Equifax and FICO. But smaller lenders might alert just one of these agencies. "There's no requirement to report to all three credit bureaus," Ulzheimer says. "As a lender, you can choose to report to one or two, or none, or all three."

Two other types of information can find their way into your credit file and can negatively affect your score.

First, debt collectors sometimes report information about you to the credit bureaus, such as third-party collection accounts. Credit reporting agencies may also turn to public records, such as bankruptcy filings, to collect data.

In recent years, some changes have made it easier to maintain a better credit score when you experience some types of financial difficulty. For example, the three major credit reporting agencies crafted new rules in 2017 that instituted a 180-day waiting period before medical debts appear in your credit report. This gives you more time to resolve your debt with medical providers and insurance companies.

Other information that used to appear in your credit report – such as tax liens and civil judgments – no longer does, says Thomas Nitzsche, manager of media and brand at nonprofit credit counseling agency Money Management International.

"From a consumer standpoint, it's obviously a good thing," he says.

By law, the bureaus can provide information about you to:

• Lenders.
• Employers.
• Volunteer groups.
• Government agencies.
• Landlords.
• Banks and credit unions.
• Payment processors.
• Retail stores.
• Debt buyers and collectors.
• Insurance companies.
• Telecommunications and utility providers.
• Casinos that extend credit or take checks.

The notion that multiple credit reporting agencies are keeping tabs on your spending might seem like an invasion of privacy – and maybe dangerous, especially in light of a series of highly publicized data breaches. But there is no practical way to avoid having your transactions documented, says Ulzheimer.

"Live with the fact that you're going to have a credit report," he says. "It's better to understand how they work than to sit there and complain about them."

How Do the Credit Reporting Agencies Use Your Information?

Your financial information goes into a credit report that serves as the basis of your credit score. To calculate a credit score, the agencies must "marry a credit report with a scoring model," Ulzheimer says.

The primary scoring models – FICO and VantageScore – are "the King Kong and King Kong Jr. of the scoring industry," he says.

FICO created and owns the oldest and most widely used scoring model. FICO allows the credit bureaus to use its algorithm to generate credit scores, says Ulzheimer. In 2006, Equifax, Experian and TransUnion joined forces to create their own credit scoring model, VantageScore, as an alternative to FICO.

Why Are All 3 Credit Scores Not the Same?

Each credit reporting agency collects and stores information in its own way, which can account for some slight differences in scores, according to myFICO.

For this reason, it's important to know which bureau and scoring model a lender will use "so you don't experience any surprises when they pull your credit," Nitzsche says.

In addition, lenders and collection agencies may not report to each bureau. Nitzsche says, "This means that one credit bureau will have all that creditor transaction history while the other two do not, resulting in different relevant information impacting the score."

The information also may not be reported to each agency at the same time, resulting in slightly different scores. "Your credit reports are constantly going through changes through the update process by your lenders," Ulzheimer says. "So, your credit report next week is likely to look different than your credit report today."

And it's possible that other factors – such as applying for credit at different places under slightly different names – could cause discrepancies in scores.

Major credit score differences aren't common and are usually the result of the agencies having significantly different information.

How to Dispute Errors On Your Credit Report

If you find an error in your credit report, you should try to get it fixed right away. Each of the three major credit reporting agencies allows you to dispute the information in your report. According to the Consumer Financial Protection Bureau, you should:

• Provide a written explanation of what you think is wrong.
• Attach copies of any information that supports your case.

The CFPB even has instructions and a template letter on its website that you can use as a guide.
All three agencies allow you to report a dispute on their website. Use the following links to access the dispute instructions:

You can also mail a letter if you prefer. In your letter, make sure to include your full contact information, including a phone number. Identify all mistakes, and ask that they be removed or corrected. It also helps to include a copy of your credit report with the errors circled or otherwise highlighted. The CFPB says one option is to send your dispute by certified mail and to request a return receipt.

Can You Get Your Credit Score From All 3 Major Credit Bureaus for Free?

It is easier than ever to see your score for free. Experian lets you check your FICO score for free. Equifax allows free access to your Vantage 3.0 score, which is not used by nearly as many lenders as the FICO score. TransUnion also allows you to check your Vantage 3.0 score, but only if you become a TransUnion member, which costs $24.95 per month.

In addition, some credit card issuers, banks and loan companies let you check your score for free as a perk of being a customer.

What Is the Danger of Ignoring Your Credit Report?

When you're going to make a major purchase, such as a new car or home, do not wait until the last minute to check your credit report for errors, Nitzsche says.

"Sometimes it takes a matter of weeks or months to get things resolved," he says.

By federal law, the three major credit reporting agencies must provide one copy of your credit report to you for free each year. Through the rest of 2022, though, you can get these free reports weekly, a temporary perk that the agencies introduced at the beginning of the COVID-19 pandemic. To access your report, go to the official website, AnnualCreditReport.com.

Ulzheimer urges people to regularly monitor their credit reports, especially now that doing so is free on a weekly basis. "Yearly isn't good enough any longer," he says. "I'd go to monthly or, at worst, every few months, especially now that you can get free reports every week."

Consider signing up for a service that will let you access your credit report as often as you'd like. You may have a credit card with unlimited access to your report as a benefit. "So many companies are willing to give them to you for free," Ulzheimer says.

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