The Differences Between Three Credit Bureaus

There are three major credit bureaus. credit card and hand image by Warren Millar from Fotolia.com

The three credit bureaus are Equifax, Experian and TransUnion. These bureaus collect information from loans, past-due accounts and other sources of credit. The information is collected over a seven-year span and sometimes longer. The information helps lenders determine the credit worthiness of an applicant. Each bureau uses data and formulas to create one credit score for each person.

Regions

Each credit bureau gathers information in different regions through different companies. For example, some regions may specifically report to Equifax, while others may report to TransUnion or to Experian. A company may use one, two or all three services to determine an applicant's credit worthiness. In addition, these companies may report information to all three bureaus or only to one or two. You can determine which bureaus each companies uses by simply asking a company representative.

Reporting

While each credit bureau collects credit and payment information, they do not hold the exact same information for each account. Some items may appear on one or two of the bureaus' reports, but may not appear on all three. The credit bureaus also may receive notification of updated or late payments at different times, or they may remove old accounts from their records at different times. Some companies submit loan updates at certain times of the month, and it may take additional time for the bureau's report to reflect these updates.

Scores

Each of these bureaus creates a credit score based on its own calculation formula. Some of the calculation criteria are the same for all three bureaus, but some are different. Criteria may include the number of accounts open, payments missed and made on time, and how many times a company checks your credit. Each criterion has a different level of significance depending on that bureau's calculation method. The timing of the reporting of these criteria also may affect the credit score.

Suggestions

These credit bureaus often provide suggestions and methods to improve credit scores. Depending on the calculation used to create the score, one bureau may suggest that payments be timely, while another may suggest opening or closing accounts for a better rating. Each bureau usually has a list of suggestions on your credit report or on the bureau's website.

References

• My Credit Score Review: Credit bureaus: What's the Difference Between TransUnion, Equifax, and Experian?
• Spend on Life: What Is A Credit Bureau?