Credit Bureaus

The Three Major Credit Bureaus

Your credit score is one of the most valuable things to maintain for the health of your finances. Good credit not only helps you qualify for home and car loans, it can also affect your ability to get an apartment or even a job. Because your credit score is so important, it’s a good idea to regularly check it for errors.

Some people may have been victims of identity theft without ever realizing it, and this could negatively affect their credit. In other cases, the information on a credit score may be incorrect, causing a person’s credit to look worse than it is. By carefully checking your credit score, you can be sure that the information is correct and up to date; you can also see what problems you need to correct.

How Credit Bureaus Work

There are three major credit bureaus, and each one reports credit somewhat differently. A person’s credit score can vary by as many as 40 points from one company to the next. A credit bureau is simply a library or repository of credit information. Whenever any business reports credit, it may report to only one bureau. It may also report incorrectly, or a report may be filed on the wrong person’s name. This is why there might be errors on the credit report.

Each credit bureau calculates the credit score somewhat differently, and it may display that information differently from another bureau. By taking the time to understand the differences between each credit bureau, you will have an easier time understanding the information included on the report. This will make it much easier for you to check your credit and can also help you decide which credit bureau is the best for your needs.

Equifax

Equifax credit reports are some of the easiest to read because of their organization by “open” and “closed” accounts rather than grouping all accounts together. The files show up to 81 months-worth of credit history for many credit accounts, but the 81-month report may not be available for all of your accounts.

Equifax uses its own scoring calculation. Scores range from 280 to 850, where a higher score means better credit. This score is calculated differently from the FICO score, which Equifax refers to as a Beacon. This means that your credit score with Equifax may be different from your “official” score, which may cause some difficulties when applying for credit.

Experian

One unique trait that Experian credit reports have is the ability to check when an account is scheduled to fall off of your credit report. Most debts are only reported for 10 years, so being able to tell what accounts are due to expire from the report can be extremely helpful. This is especially helpful if you have any defaulted debts that are damaging your credit; Experian makes it easy to see when those blemishes will be removed from your credit score.

Experian also reports the balance on all of your open lines of credit and tracks the balance for several years. Because having several lines of credit open at once can lead to a damaged credit score, this report is very helpful in understanding why your credit may be worse than you expected.

Experian uses a credit scoring system called PLUS. This score ranges from 330 to 830, with a higher score for better credit. Many consumer financial statistics are calculated based on the Experian score.

TransUnion

Of all the credit reports, TransUnion has the most thorough information about your job history. Although this information does not affect your credit score directly, it may help to have up-to-date employer information available in your credit report when applying for a loan.

These reports have a color-coded list of all of your accounts, with each color indicating the account being satisfactory, late or in default. It also tracks how late any late payments were. TransUnion uses the standard FICO credit report system; this score ranged from 300 to 850.

No matter which credit report you choose, all of them will include your personal information, a summary of accounts, and public records such as judgments or tax liens. Different lenders may check different credit bureaus, but the history of accounts is more important to these institutions than the actual credit score. You can check your credit for free with all three lenders once a year so you can ensure that you have all of the most up-to-date information available about your credit health.