Everything you need to know about credit bureaus—and what they know about you

A credit bureau is a company that collects and stores information about your financial history. For better or worse, they may know about your past credit card payments (or lack thereof), loan balances, and whether you’ve had major financial slip-ups, like a bankruptcy.

The bureaus sell that information to lenders, employers, and other businesses in the form of credit reports. Because they have all that juicy info on you, it’s wise to understand what these agencies do and how you can verify that information.

What does a credit bureau do?

Credit bureaus collect and save information about consumers, then organize it into documents called credit reports. Credit-scoring companies, such as FICO and VantageScore, use the information in these credit reports to calculate your credit scores.

You can check your own credit reports and monitor your credit scores for free, without any impact to your credit. Lenders and other entities, such as employers, insurers, and landlords, can request your credit reports to help them determine your creditworthiness. But they’ll need a valid business reason for requesting your credit reports, and you usually have to give permission first.

Why are credit bureaus important?

Credit bureaus, also called credit reporting agencies, don't actually make lending decisions. But they do gather details about you that lenders use to make those decisions. Here's the four main types of information credit bureaus collect:

• Identifying information, such as name, address, and employer.
• Tradeline information, such as payment history and current balances on credit card accounts, mortgages, and auto loans.
• Credit inquiries, which may occur when you or someone else pulls your credit.
• Public records, such as bankruptcies, foreclosure filings, lawsuit judgements, and tax liens.

Learning how credit bureaus work can help you understand how they fit into the credit ecosystem. And knowing how your credit works overall can help you build a strong credit history. You should regularly check your credit reports to make sure there are no errors regarding your personal and financial information. It can also help you catch fraudulent accounts opened in your name.

How many credit bureaus are there?

The three big credit bureaus are Experian, Equifax, and TransUnion. A fourth credit bureau, Innovis, also collects information about you and your credit history.

But credit bureaus are just one type of consumer reporting agency, also called “specialty agencies.” There are dozens of specialty agencies that collect specific types of information about consumers. For example, some track information that’s used for employment and tenant screening, while others look at your utility accounts and insurance claims history. The Consumer Financial Protection Bureau (CFPB) created a list of consumer reporting companies with details about information they collect and how to request your own reports. Here are a few:

• National Consumer Telecom & Utilities Exchange may have information about your utility accounts, such as when you set up an account and made payments.
• ChexSystems has information on consumer checking and savings accounts.
• C.L.U.E., or the Comprehensive Loss Underwriting Exchange, collects insurance policy and claims information. Insurance companies can use this information when setting your premiums.

Who reports information to credit bureaus?

Credit card issuers, lenders, and others regularly report your account information to the credit bureaus.

Credit bureaus also find certain information on their own. For example, they go through public records to hunt down details on consumer bankruptcies, foreclosures, tax liens, and civil lawsuits.

Rent payments aren’t automatically reported to credit bureaus. But within the past few years, the credit industry started incorporating alternative data, like rent information, into credit reports and credit scores.

Services like RentTrack report rent payments to the credit bureaus, or your landlord can report them directly to Experian RentBureau. Certain credit scores include this information in your score calculations, so consistently paying on time may help boost your credit.

Where can you find your credit reports?

You can check your free credit reports at AnnualCreditReport.com every week through April 2021. The CFPB recommends checking your credit reports every few months, before applying for credit, and when you suspect identity fraud.

If you see an error on your credit reports, whether it's from a typo or potential identity theft, you can dispute the information. Under the Fair Credit Reporting Act, the credit report­ing company and the company that supplied the information must investigate and correct errors.

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