Credit Bureaus

Credit bureaus are private, for-profit businesses. At the center of the credit reporting system are three national credit bureaus — Equifax, Experian, and Trans-Union — along with about 1,500 local and regional bureaus.

The credit bureaus simply collect and collate credit information and make it available to business that subscribe to their service. They make no credit decisions. They do not deny credit; they merely report the information they have gathered. Many credit bureaus are connected to centralized computer files that contain data about millions of individuals. From these files, a credit bureau can produce for a subscribing creditor, almost instantaneously, a report about your past and present credit activity.

Credit bureaus obtain their data from banks, finance companies, merchants, credit card companies, and other creditors. These sources regularly send reports to credit bureaus containing information about the kinds of credit they extend to customers, the amount and terms of that credit, and the customers' paying habits. Credit bureaus also collect some information on any bankruptcies, tax liens, and court judgments from other sources, such as public records.

Did You Know? A group of tailors formed the first known credit bureau in London in 1803. Members of The Mutual Communication Society of London exchanged information on bad credit risks. The first US credit bureau was started in Brooklyn in 1869.

Your credit file will be maintained by one or more of the three national bureaus, and by local credit bureaus as well. As a debtor, you have the right to examine credit files held by credit bureaus, and you have specific rights and procedures for correcting mistaken information and for contesting a credit billing.