Understanding the Three Major Credit Reporting Agencies and Their Work

Understanding the Three Major Credit Reporting Agencies and Their Work

You always hear talks of credit reporting, credit score, and credit history. If your credit history is good, you are eligible for borrowing money from lenders fairly easily. On the other hand, when your credit score is not good, you will have a hard time getting anything on credit. In short, your credit score is a reliability score based on your financial performance. But who is getting all the information about your credit transactions? What do they do with this information? Of course, you have credit reporting agencies, also written shortly as CRAs, which compile all your credit data.

Introducing Credit Reporting Agencies

Credit reporting agencies compile your credit data in order to compile a history of your credit transactions. Whenever you visit a lender to buy a house, get a car or take out a credit card, they have to pull your credit information. This information is sold to the lenders by the credit bureaus. By looking into your credit history, the lender is in a position to decide whether you should be given the loan or not. In addition to that, it is the job of the lender to report all the payments you are making to the credit reporting agencies. It is not just the good but also the missed payments that are reported to the CRAs.

Credit reporting agencies have a method of rating you based on your performance. As a result of that, they give you a score called the credit score. This credit score can range from 350 to 850. People in the upward range i.e. 850 are exceptionally good with their credit history. If you are below 500 mark, your credit history will show some really bad entries. Some of these entries will not go away from your credit history for up to seven years. In addition to compiling all your data, these credit reporting agencies also provide you with facilities like pulling your credit report for free.

You can use their websites to pull your credit report without spending any money. Furthermore, when you pull your records from their websites, you don’t affect your credit score negatively at all. These are soft inquiries and they don’t have any impact on your score.

The Three Major Credit Reporting Agencies

There are three agencies that are considered major in the country. When you pull your report or when the lender pulls your credit reports, they are usually from one of these credit reporting agencies. In a similar way, these are the major agencies your lender reports all your good and payments to. The names of these three credit reporting agencies are: Experian, TransUnion, and Equifax. Let’s get to know them one by one.


Experian is not a truly American agency. It came to the US from England. When this agency started, it was named Manchester Guardian Society. This agency has been around for nearly two centuries now. Experian is one of the most well-known of the three major agencies. It provides you a lot of free services as well. For example, if you go to its website and register with your personal and correct information, you will get access to a credit tracker. This tracker will keep you informed on where your credit score it on any given day. Of course, you can always access your credit reports for free. One of the most famous credit scoring models in the US is FICO, and that’s what this agency uses.


Equifax is one of the oldest of all the major credit bureaus in the US today. It started working in 1899 and since then it has been one of the most reliable names in the financial sector. The company has always tried to go a step ahead of its competitors when it comes to serving its customers. If you are dealing with a lender who uses the VantageScore instead of the FICO score, you would want to take the help of Equifax. The other two credit reporting agencies will give you access to your FICO score but with Equifax, you can also know your VantageScore. While this scoring system is quite similar to FICO score, there are some lenders who use it today.

Equifax is an old company but in the recent times, it has earned a bad name because of a security breach that took place in 2017. Millions upon millions of customer records were compromised during this security breach. This is the worst thing that can happen to credit reporting agencies. After all, they all hold the most sensitive information of the citizens. Whether you are affected by the security breach or not can be checked with the help of an online tool made available by Equifax.


TransUnion did not start out as a credit reporting agency. It was a holding company in the beginning working on railcar leases. It soon shifted its direction and came in the business of data collection for financial purposes. It won’t be wrong to say that TransUnion is one of the most advanced credit reporting agencies. It always adapts to the new technology before other credit reporting agencies. Its online system for access credit reports is one of the best and the oldest too. The company provides some exceptional services to the citizens of the US.

For example, if you think that your information has been stolen and is being used by someone, you just need to inform that to TransUnion. The company will go the extra mile and report the mishap and credit freeze to the other major credit reporting agencies too.

Bottom Line

The three major credit reporting agencies work together when needed. For example, the new VantageScore credit scoring system was a creation of the three together. They also keep coming up with new tools to make things easier for the citizens. For example, you can now report your good payments directly as well rather than relying completely on the lenders. This free tool can help you make improvements to your credit score and keep track of the improvement all along.

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