Who Owns the Credit Bureaus and How They Are Regulated

The credit bureaus are private companies, not government agencies, which can make it seem like they're above the law. Equifax, Experian, and TransUnion are the three major credit bureaus in the US.

These companies are for-profit businesses, meaning their primary goal is to make money. They collect and sell consumer credit data to lenders, creditors, and other businesses.

The credit bureaus are not directly regulated by the government, but they are subject to oversight by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).

The history of credit bureaus is a fascinating story that spans centuries. The first recorded group that shared credit information about consumers was the "Society of Guardians for the Protection of Trade Against Swindlers and Sharpers", founded in London in 1776.

These early credit reporting agencies were small, local organizations made up of merchants sharing information about consumers, which allowed them to offer credit to more people and avoid lending to high-risk individuals.

In 1960, it's estimated that about 1,500 independent local credit bureaus were in operation in the United States. These bureaus were often "working with local lenders with incomplete and often unverifiable information."

The credit bureaus didn't just collect basic information like name and loan history; they gathered sensitive personal information like marital status, age, gender, race, religion, employment history, driving records, and drinking habits.

They even went so far as to check local newspapers for announcements of promotions, marriages, arrests, and deaths, and attached the newspaper clippings to consumers' credit reports. They would also ask neighbors and colleagues for testimonies about a person's character.

The credit bureaus were focused solely on serving the local creditors that belonged to their respective organizations, and they typically only reported derogatory information. There was no standardized way to evaluate a person's creditworthiness, and it was all based on the subjective whims and prejudices of the creditor looking at their credit file.

In 1971, the Fair Credit Reporting Act (FCRA) was passed to ensure the "accuracy, fairness, and privacy of information in the files of consumer reporting agencies." This marked a significant shift in the industry, establishing requirements for the accuracy of consumer credit files and access to their information.

The Fair Credit Reporting Act (FCRA) was passed in 1971 to ensure the accuracy and fairness of consumer credit files.

This legislation established requirements for the accuracy of consumer credit files and access to their information, aiming to protect consumers from unfair practices in the credit reporting industry.

In the 1960s, many small, local credit bureaus joined together to form networks spanning the nation, paving the way for the modern credit bureaus we know today.

Experian is one of the three major consumer credit agencies, but it also reports on business credit.

Experian's business credit reports can be purchased by other companies, such as lenders or suppliers, to assess how a business manages its credit obligations.

Experian has a long history dating back almost 200 years to the Manchester Guardian Society, which was formed in England in 1826 to share information on customers who didn't pay their debts.

Experian was formed through the acquisition of various groups, including the Manchester Guardian Society and a group of merchants in Dallas, by TRW, an engineering and electronics conglomerate.

Experian was acquired by Great Universal Stores Limited (GUS) and began trading on the London Stock Exchange in 2006 after demerging from GUS.

Experian has been involved in several controversies, including a 1991 case where a TRW investigator incorrectly reported that 1,400 people in Vermont had not paid their property taxes.

Experian has also been criticized for its customer service and was hit with several lawsuits.

Equifax has a long history, founded in 1899 by two brothers in Atlanta as the Retail Credit Company.

The company has grown significantly over the years, with a presence in 24 countries and $5.1 billion in revenue.

Equifax has a workforce of 14,000 employees, working to provide credit monitoring and identity theft protection services.

In September 2019, the company revealed a major data breach that exposed the credit card numbers, birthdates, and Social Security numbers of 147 million people in the US, Canada, and the UK.

Equifax has since agreed to a $425 million settlement to help those affected by the breach.

The company has overhauled its cybersecurity program since the data breach, a move that should give consumers more confidence in their ability to protect sensitive information.

Equifax Complete Premier is a comprehensive credit monitoring and identity theft protection product that alerts users to changes in their credit report and provides financial alerts and lost wallet assistance.

CBCInnovis is a separate company from Innovis, despite sharing a similar name and parent company. It's a third-party company that pulls credit reports from Experian, Equifax, and TransUnion to create a "tri-merge" credit report.

These tri-merge reports are sold to lenders like banks and mortgage companies.

CBCInnovis doesn't maintain its own repository of consumer credit data, unlike Innovis and other credit bureaus.

In the 1960s, many small local credit bureaus started to join together, forming networks that spanned the nation.

This marked a significant shift in the credit reporting industry, paving the way for the modern credit bureaus we know today.

The Fair Credit Reporting Act was passed in 1971, establishing requirements for the accuracy of consumer credit files and access to their information.

This legislation aimed to protect consumers from unfair practices that were rampant in the credit reporting industry.

Equifax's acquisition of Veda Group in 2016 added another international credit bureau to its portfolio, expanding its reach to over 24 countries.

TransUnion, on the other hand, has a significant presence in North America, with operations in the United States and Canada, as well as a smaller footprint in other countries.

Experian's purchase of CSIdentity in 2015 gave it access to a wealth of personal and business data, further solidifying its position as a major player in the credit bureau industry.

Dun & Bradstreet is the oldest credit bureau in the United States, founded in 1841. It started as the Mercantile Agency, aiming to help merchants evaluate the creditworthiness of their business customers.

Today, D&B collects information on over 265 million businesses worldwide. This information is used to maintain credit files on each business.

Dun & Bradstreet is also the largest of the three major credit bureaus. To get started with building business credit, you need a D-U-N-S number, which is free to obtain.

D&B uses this number to create a record for your business in their system.

PayNet is a business credit bureau that focuses on financial tradelines, and it's one of the smaller business credit reporting agencies. It still maintains data on over 22 million business contracts or over $1.7 trillion in commercial credit obligations.

Equifax acquired PayNet in 2019, but it still operates as its own independent division of the larger credit bureau. This means that PayNet continues to provide unique insights to businesses.

If your company has a business credit report with PayNet, you can expect to see details like payment history, delinquency history (if applicable), years in business, and years experience in borrowing. These reports also feature a business credit score, such as the PayNet MasterScore.

The 3 business credit bureaus are Experian, Equifax, and TransUnion. They all have reports, but they're not identical.

Experian, Equifax, and TransUnion are the three major credit bureaus for businesses, and they're all about tracking business credit history. The reports they provide are valuable for business owners who want to monitor their creditworthiness.

Each of the 3 credit bureaus has its own report, and none of them are more valuable than the others. Business credit reports are different from personal credit reports, and they're used to assess a business's creditworthiness.

The 3 credit bureaus all have their own strengths and weaknesses, but they're all important for businesses that want to establish or improve their credit.

The Fair Credit Reporting Act (FCRA) was passed in 1971 to ensure the accuracy, fairness, and privacy of information in consumer credit files.

The FCRA established several key rights for consumers, including the right to be notified of negative action taken against them, the right to access their credit files, and the right to dispute inaccurate information.

Consumers also have the right to request to be excluded from lists for unsolicited credit and insurance offers, and those who appear on a list of prospects requested by a lender must be extended a firm offer of credit.

In 1996, the FCRA was amended to extend additional protections to consumers, including the right to take legal action against anyone who obtains their credit report without a permissible purpose.

Here are the key rights established by the FCRA:

Credit bureaus can be held liable for knowingly reporting misinformation, and must investigate disputes within a certain period of time, usually 30 days.

The Fair Credit Reporting Act (FCRA) was passed in 1971 to ensure the accuracy, fairness, and privacy of information in consumer credit files. This law was a game-changer for consumers, providing them with important rights and protections.

Consumers have the right to be notified if negative action is taken against them because of the information in their credit files. They also have the right to find out what's in their credit files, dispute inaccurate information, and have it corrected or deleted.

Here are the key rights of consumers under the FCRA:

The FCRA was amended in 1996 to provide additional protections for consumers. These include the right to take legal action against anyone who obtains their credit report without a permissible purpose, and the right to hold credit bureaus liable for knowingly reporting misinformation.

Unfortunately, historical discrimination is still baked into the credit system.

The credit system is not as equal as it seems, despite the Equal Credit Opportunity Act prohibiting discrimination based on age, gender, ethnicity, nationality, or marital status.

Historical and ongoing discrimination affects consumers in ways that have a significant impact on their credit scores.

Research by the Federal Reserve Board found that on average, Black Americans and Hispanic Americans have lower credit scores than non-Hispanic White Americans, even after controlling for personal demographic characteristics, location, and income.

Past and present discrimination against some demographics in the United States has resulted in communities of color having less income, capital, and collateral, making it harder for them to obtain affordable credit and build a credit history.

This creates a cycle where those who are less privileged are further burdened by the credit system, and it provides few opportunities for disadvantaged consumers to improve their situation.

A credit score is a three-digit number that represents your creditworthiness, ranging from 300 to 850. It's calculated based on information from the three major credit bureaus: Equifax, Experian, and TransUnion.

The most widely used credit score is the FICO score, which takes into account your payment history, credit utilization, length of credit history, and new credit inquiries. A good FICO score can help you qualify for loans and credit cards with lower interest rates.

Payment history accounts for 35% of your FICO score, making it the most important factor. Missing payments can significantly lower your score, while making on-time payments can help improve it.

Credit utilization, which accounts for 30% of your FICO score, refers to the amount of credit being used compared to the credit limit. Keeping your credit utilization below 30% can help maintain a healthy credit score.

The length of your credit history, which accounts for 15% of your FICO score, can be improved by keeping old accounts open and in good standing. Closing old accounts can actually lower your score.

New credit inquiries, which account for 10% of your FICO score, can temporarily lower your score. However, multiple inquiries in a short period can have a more significant impact.

Credit mix, which accounts for 10% of your FICO score, refers to the variety of credit types you have, such as credit cards, loans, and mortgages. A diverse mix of credit can help improve your score.