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How are the different credit bureaus used?

There are three major credit bureaus in the U.S. — Equifax™, TransUnion® and Experian® — all of which are used for a variety of different reasons, such as providing a credit report. Credit reports are generally provided for free once a year from each of these three bureaus. Credit bureaus are also called Credit Reporting Agencies or CRAs.

Each credit bureau issues its own report, so there could be three different credit reports with your name. You can request just one of the three, or all of them by reaching out to the bureaus directly. You can also request your credit report through your bank. For example, you can access your free Experian credit report when you enroll in Chase Credit Journey®.

You may be wondering how these credit bureaus work and how they differ. In this article, we’ll discuss:

  • What credit bureaus are and what they do
  • How credit bureaus measure your credit score
  • The differences between credit bureaus
  • Which credit bureau is the most used
  • Which credit bureau is the most accurate

What is a credit bureau?

A credit bureau is a company that collects account information from credit issuers, banks and public records and gives that information to you, the consumer, in the form of a credit report. Credit bureaus are essentially data gatherers. While it can feel a little intrusive to have your information collected and shared, this data reporting actually invites transparency. It also provides opportunities to see what banks and other lenders are seeing when they render a decision with regard to your creditworthiness. So, it’s important to have your financial information available to the bureaus.

This information includes:

  • Credit activity
  • Status and balance of your account(s)
  • Payment history
  • Debt collections and bankruptcies
  • Dates of when accounts have been opened/closed

This information is used to help generate credit reports and provide you with a credit score. Note that a credit score may differ across credit bureaus given that there are two different scoring models to calculate it— the FICO® and VantageScore® models.

As noted above, in the U.S., there are three major credit bureaus: Equifax, TransUnion and Experian. Each of these credit bureaus collects your information from multiple sources. They may receive this information voluntarily from credit card issuers, banks, auto lenders, mortgage lenders or debt collection agencies. They also may gather information that is available to the public, including court records and bankruptcy filings.

Note that other reporting agencies (or minor credit bureaus) also exist. These companies may offer services that collect specific, nuanced information, such as on borrowers who have little credit history or activity. Minor credit bureaus including CoreLogic Credco, MicroBilt/PRBC and Innovis may have expertise in reporting particular types of data which can be useful to lenders.

The three major credit bureaus work in similar yet slightly different ways from one another. Below, we'll dive deeper into the specifics of each bureau, demonstrating what they do and how they differ.

How do credit bureaus measure my credit score?

Credit bureaus gather similar types of data and use that information to help generate a credit score, which is a three-digit number that reflects your creditworthiness. To calculate this, they use either the VantageScore model or the FICO model. Both of the scoring models are used widely and are important, but the way each model calculates the score differs.

FICO score model

The FICO scoring model was developed by the Fair Isaac Corporation and is the most common model used by lenders. This model breaks down the data into five main groups, each of which are weighed differently to calculate your score:

  • Payment history (35%)
  • Amounts owed (30%)
  • Length of credit history (15%)
  • New credit (10%)
  • Credit mix (10%)

As you can see, if a credit bureau uses the FICO score model to generate your credit score, your payment history can have a major impact on your score because it holds the most weight. Payment history outlines how and when you made payments to creditors over time. This includes any missed or late payments, as well as any payments made on time and in full. These payments include loans, credit card balances and mortgages.

VantageScore model

This model founded in 2006 uses similar data to the FICO model. It can calculate a score as long as there is at least one account, regardless of how old that account is. Using information from one of the credit bureaus, the VantageScore model calculates your score by considering the following factors:

  • Payment history (40%)
  • Age and type of credit (21%)
  • Credit utilization (20%)
  • Balances (11%)
  • New credit (5%)
  • Available credit (3%)

The VantageScore model weighs payment history even more than the FICO score, so it’s important to a keep factor like this in mind when you receive your credit report.

Because these models differ in how they calculate the scores, be prepared to see different credit scores from your credit bureaus. This doesn’t necessarily mean there is an error or anything wrong. It’s possible that one credit bureau used a different scoring model from another.

The differences between credit bureaus

While all three credit bureaus generally collect similar types of information and provide similar services (such as identity monitoring, financial tools and credit scores), they differ slightly. The main differences come down to the credit score calculations used and how they process information.

Experian

This is the largest credit bureau, maintaining credit information for over 220 million consumers in the U.S. Unlike the other credit bureaus, Experian collects rental payment data from landlords who report this information. Their credit breakdown is:

  • Payment history (35%)
  • Credit utilization (30%)
  • Credit age (15%)
  • Different types of credit (10%)
  • Number of inquiries (10%)

Experian uses a FICO credit score range of 300-850.

Equifax

Equifax is based in Atlanta, Georgia and was founded in 1899, and is the second-largest credit bureau after Experian. While Equifax also uses the FICO scoring model, their own range is slightly different (see below). Equifax breaks down their credit factors as:

  • Payment history (35%)
  • Credit utilization (30%)
  • Credit age (15%)
  • Different types of credit (10%)
  • Number of inquiries (10%)

Equifax uses a credit score range of 280-850.

TransUnion

TransUnion gathers information on over 1 billion consumers in over 30 countries across the globe. This company weighs your payment history and credit age more so than the other two credit bureaus. Their breakdown of credit factors is:

  • Payment history (40%)
  • Credit utilization (20%)
  • Credit age (21%)
  • Recently reported balances (11%)
  • New credit (5%)
  • Available credit (3%)

TransUnion uses a FICO credit score range of 300-850.

Which credit bureau is most used?

One credit bureau is not necessarily used more over another. Credit bureaus are used for different services, including credit reports, credit scores and tools like identity monitoring. Experian, Equifax and TransUnion are all respected, credible bureaus that are used widely.

Which credit bureau is most accurate?

One credit bureau isn’t more accurate than another, rather, they may simply have different methods of calculating your credit score. It’s important to note that all three bureaus are used widely in the U.S. None of them are more “important” than the others. There is no “best” credit bureau—all three bureaus can offer helpful information and tools to help you make financial decisions.

In conclusion

The three major credit bureaus all collect similar types of information but compile and calculate that information in different ways. Understanding how each bureau tabulates your credit score is critical to improving your overall financial knowledge. If you know what the different credit score ranges are for each bureau, you can get a well-rounded idea of how healthy your credit is. Using the reports from all three credit bureaus can provide you with the insight and understanding necessary to make important financial choices.

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