What are the 3 credit reporting agencies?

Everyone who borrows money and pays bills has a credit score. These scores are determined by a trio of credit bureaus, also called credit reporting agencies. What are the three credit reporting agencies? TransUnion^®, Equifax^®, and Experian^®. Scores from each of these agencies can differ slightly based on various factors.

What’s the difference between TransUnion^® vs. Equifax^® vs. Experian^®? What impact do they have on your credit report and credit scores? And which agency’s score matters most? Read on for answers to these and other key questions.

Key takeaways:

• The three major credit reporting agencies in the United States are Equifax^®, Experian^®, and TransUnion^®, which independently collect and maintain consumer credit data.
• Credit scores, ranging from 300 to 850, are calculated using models like FICO^® and VantageScore^®, and scores may differ slightly across agencies due to varying reporting practices.
• Each bureau offers services such as credit monitoring, identity protection, and free weekly credit reports to help consumers track and manage their credit.
• No single bureau’s score or credit report is more important than the others, and checking all three regularly helps ensure accuracy and detect discrepancies.

Overview of credit bureaus

Equifax^®, Experian^®, and TransUnion^® are the three primary credit reporting bureaus in the United States. They collect and maintain consumer credit information, including your borrowing and repayment history from lenders, credit card companies, and public records. They store this data within your credit file and then determine a number between 300 and 850 that characterizes your financial habits – better known as your credit score. Each bureau operates differently and independently.

“While we often call them bureaus, which makes them sound like government entities, these are actually consumer reporting agencies. They are for-profit companies in the business of gathering and distributing consumer information to help lenders make better lending decisions,” says Todd Christensen, housing counselor and education manager for Money Fit by DRS.

Lenders can report good or bad credit habits – including missed payments and on-time payments – to a single agency, two out of the three agencies, or all three. The three agencies use different scoring models – most commonly VantageScore^® and FICO^®. VantageScore^® was created as a joint project among all the credit bureaus. This scoring system tends to be more favorable to borrowers with limited credit history. FICO^®, meanwhile, stands for Fair Isaac Corporation, and the acronym now refers to the software that calculates credit scores.

Note that there are several versions of FICO^® (the most recent is FICO^® Score 10), and each version can calculate a slightly different score. Per myFICO^®, this scoring system is similar across the three credit agencies; in other words, if you have high FICO^® Scores on data from TransUnion^®, you’ll likely see a similar high FICO^® Score at the other two agencies. Also, be aware that the FICO^® Score that lenders evaluate could differ slightly from the free credit scores available to consumers. All three bureaus offer free credit reports and other services. But while consumers and lenders alike can have access to slightly different scores, they are close enough that any free consumer scores still allow for a general understanding of creditworthiness.

TransUnion^®

After beginning in 1968 as the Union Tank Car Company – a holding company for a railcar leasing business – TransUnion^® swiftly expanded into consumer credit by purchasing a small Chicago bureau. It’s now a worldwide provider of risk and information solutions, including consumer credit reports, credit monitoring, credit disputes, identity protection services, fraud alerts, and lender analytics (its TrueIdentity product has been discontinued).

“Their products include a free credit freeze option and instant alerts. I personally use their Score and Report service, which gives monthly updates,” says personal finance expert Andrew Lokenauth. “Another thing that sets them apart is their employment verification services. They’re also pretty big in the rental screening business.”

Equifax^®

When Equifax^® was first established in 1899 as the Retail Credit Company in Atlanta, it maintained handwritten ledgers on consumers for businesses and insurance providers. Since then, it has developed into a global credit and data analytics company that offers employment verification, business risk assessment tools, identity theft protection, and credit monitoring.

Experian^®

Before its U.S. expansion through mergers and acquisitions, Experian^® was founded in Nottingham, UK, in the 1960s. These days, it provides identity protection, credit reports, advanced data services for businesses, and direct-to-consumer credit score tracking. Business credit and marketing intelligence products from Experian^® also help decision-makers better understand the risk profile of a potential borrower or tenant for commercial lending and real estate investment.

Understanding credit reports

Your entire borrowing history, including accounts, balances, and payment trends, is documented in a credit report. Credit reports serve as a financial report card of sorts. They are comprised of different sections, including personal information, credit accounts, credit inquiries, and public records.

The good news is that you can access a free credit report from each bureau weekly at AnnualCreditReport.com. Note that each of these reports will reveal good and bad credit actions that have been reported to each bureau. Also, when it comes to credit scores, expect them to be slightly different from agency to agency. Part of the reason is that lenders don’t always report credit behaviors to all agencies, which can lead to a score fluctuation.

“It’s important to check your credit reports from each bureau regularly. Verifying accuracy is crucial. Keep an eye out for any outdated negative marks, unfamiliar accounts, and errors or inaccuracies in account status,” says Dennis Shirshikov, a professor of finance and economics at City University of New York/Queens College.

How often is your credit report updated?

Lenders and creditors make credit action reports to the agencies every month, although not all lenders will report to all three agencies. That’s why checking your free credit reports every week can better help you understand any recent credit actions – good or bad – that impact your credit score as well as your creditworthiness.

“Although the timing varies, depending on when your creditors provide the bureaus with updates, credit reports are typically updated every 30 to 45 days,” Shirshikov says.

Demystifying credit score ranges

As mentioned earlier, credit scores are three-digit figures that range from 300 to 850. The values of these scores are often denoted as ranges that correspond to credit risk or creditworthiness. The common ranges are:

• 800+: Excellent (or exceptional)
• 740 – 799: Very good
• 670 – 739: Good
• 580 – 669: Fair
• Below 580: Poor

“A credit score does not predict whether you are a good or bad person. It’s simply an attempt to predict your future likelihood of missing payments based on your history of credit activity,” Christensen says. “The higher your score, the higher the likelihood you will pay your debts on time and as agreed. And the more recent the activity, the more reliable its role as a predictor is.”

How monitoring services calculate your score

VantageScore^® is used by Equifax^®, Experian^®, and TransUnion^® when they provide free (educational) credit scores to consumers. But while some lenders rely on VantageScore^® during a credit approval process, many still assess scores using FICO Scores 2, 4, or 5 (for mortgages) or FICO^® Score 8 (for general lending purposes).

“Popular choices for accessing your credit scores include myFICO^® – which provides all three bureau scores – Experian^®’s own monitoring, and Credit Karma, which uses data from Equifax^® and TransUnion^®. Free monitoring is also offered by many banks and credit card companies, though the model and frequency of updates they follow may differ,” says Shirshikov.

TransUnion^® vs. Equifax^® vs. Experian^®: Why scores differ

Truth is, Equifax^®, Experian^®, and TransUnion^® all utilize VantageScore^® instead of FICO^® when calculating free credit scores. Experian^® also provides a free FICO^® Score 8 to consumers. These free scores can differ between agencies, because credit details are not reported to all the bureaus by every lender. Also, it’s possible that one agency could have errors that affect the credit scores it gives.

“Each bureau has its own way of calculating credit scores. Because data reporting companies, including lenders and creditors, have a contract in place with each credit reporting agency, they may not report to all three agencies,” says Christensen. “So some of your information might be on one report but not on another.”

PTransUnion^® vs. Equifax^® vs. Experian^®: What score matters?

Rest assured that one agency’s credit score is not more significant or weighty than another’s. Again, lenders evaluate scores from all three credit reporting bureaus.

“From a consumer standpoint, the only score that matters is the one that your lender or creditor uses,” Christensen says.

Remember: When you request a free credit score from one or more of the agencies, you are getting a VantageScore^® calculation that should only be used for educational purposes. This credit score doesn’t mirror the FICO^® Scores utilized by many lenders. But any free scores you access should be close enough so that you can make a more informed decision about your creditworthiness or risk level before applying for a mortgage, personal loan, or other credit product.

TransUnion^® vs. Equifax^® vs. Experian^® FAQ

Still have questions? Let’s drill down a bit deeper to further clarify credit score issues.

Which score is more accurate?

The completeness and timeliness of the information within your particular credit profile determine accuracy, not the credit bureaus. Lenders typically use all three credit bureaus to prevent bias, but if one particular bureau has more recent data from your major creditors, it could generate a score that’s technically more accurate to your current situation.

What should I do if my credit scores are different?

There is little you can do if your score differs between bureaus. However, you can take action by building up your credit and correcting errors. If you think your credit report has errors, you can file a dispute with the bureau you believe made the mistake.

What factors affect my credit score?

The following factors can impact your credit score:

• Your payment history
• Your amounts owed
• The length of your credit history
• How many credit lines you’re currently managing
• Any new lines of credit you’ve applied for

When should I check my credit score?

You should check your credit score at least annually, if not more often. Frequent credit score checks may help you catch discrepancies before they cause damage. Each of the three credit bureaus offers consumers access to a free credit report each week.

The bottom line: Credit scores can vary between the bureaus

You may notice a difference between your free credit scores from TransUnion^®, Experian^®, and Equifax^®. But remember that all three bureaus may use the same scoring model – VantageScore^® – when it comes to no-charge scores. Make it a point to access your free weekly credit reports to better understand your level of credit risk versus creditworthiness.

Eager to apply for a personal loan with Rocket Loans^SM? Be sure to review your credit score first.