The History of Credit Bureaus
Credit bureaus have become a staple in American life. From insurance policies to jobs, credit is checked on a daily basis, and every day more data is collected by the credit bureaus to report more data if asked. Though it would seem credit bureaus coincided with the advent of the electronic age, the fact is they didn't. Credit reporting has been around for 100 years; it was just a more laborious, manual task in the beginning.
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Early History
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Credit reporting began in the late 1800s when retailers compared notes about which customers were remiss on payments. If a customer requested credit, the retailer would request data on the customer from other retailers to decide if the customer was creditworthy. This was the beginning of credit reporting. Over the years, this method was streamlined and individuals began to make this their only activity. The value of the information made this activity perfect for a business and in the early 1900s, retail credit shops opened. These businesses eventually branched out and today there are three major credit bureaus, one of which, Equifax, can trace its roots to a small agency formed at the turn of the 20th century.
Equifax
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Equifax has its roots in a small business called Retail Credit Company begun in 1899 by Cator Woolford, a grocer in Chattanooga, Tenn. Woolford began by compiling a creditworthiness list for the Retail Grocer's Association. He covered the cost of production by selling it to his fellow grocers. He decided to make it a career and moved to Atlanta with his business. It grew in no time and in 1901, Woolford branched out to compiling "moral hazard" information on customers for the Equitable Life Assurance Society. By 1908 he offered automobile liability insurance reports. Woolford expanded by purchasing smaller credit agencies and by the late 1930s had 97 branches across the country. Passage of the Fair Credit Reporting Act of 1971 regulated the business for the first time, and in 1974 Retail Credit ran afoul of the new regulations. In 1979 it changed its name to Equifax, a name it retains to this day.
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TransUnion
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The Union Tank Car Company formed TransUnion in 1968 as a parent holding company. In 1969, TransUnion acquired the Cook County Credit Bureau, which had card files on 3.6 million people. TransUnion used its technical expertise and was the first to computerize its records using tape-to-disk transfers, allowing it to update records more rapidly. It then upgraded to be the first to offer online data storage and computerized information retrieval. It continued to use technology to maintain its market share, and through acquisitions and expansion, by 1988 it had full national coverage and maintained and updated information on every market-active consumer. As of 2011 it is in 25 countries on five continents.
Experian
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Experian is the result of the acquisition of TRW, formerly the largest credit bureau in the United States. TRW, Inc. was formed by its parent company TRW in the late 1960s to challenge Dun & Bradstreet, a business-to-business credit reporting agency. In 1996 it was acquired by GUS, a British conglomerate, and merged with CCN, which by 1996 had become the leading credit reporting agency in the UK. This merger became Experian.
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