The 3 Credit Bureaus

“Fixing Your Credit Does Not Require Knowing Everything About The 3 Credit Bureaus, But Knowing The Basics Sure Does Help.”

The 3 Credit Bureaus Basics

There are three main credit bureaus:

Equifax
Experian
TransUnion

Approximately 90% of the adults in America have a credit file with one or more of these three bureaus.

Interestingly, many people think that the credit bureaus are a part of the government. They are not.

The truth is that all three bureaus are regular companies just like Sears or Microsoft or any other for-profit company. Their business though is based on gathering information about a person’s credit history and then selling it to other companies that are legally allowed to see your credit history.

Examples of businesses that are allowed to request your credit report would be creditors like banks, credit card companies, retail stores and mortgage companies. Others that can also check your credit would include a landlord or your employer and even insurance companies.

I mentioned in “Fix Your Credit Following Credit Bureaus” that the 3 credit bureaus make the overwhelming majority of their money from these companies that they sell your credit report to, not from you when you purchase a copy of your own credit report.

If you think about this for a second, then it should make sense to you as well that the 3 credit bureaus work for the ones that pay them the most money.

And they’ll do what’s in the best interest of those high paying customers.

So, if:

the 3 credit bureaus make more money from the lenders and
the lenders make their money by the interest they charge you and
the lenders can make more money when they can charge you higher rates of interest,
then the 3 credit bureaus want you to have the worst credit possible to make those lenders happy.

This situation got so bad that the government had to step in and put legislation in place to make sure the three main credit bureaus operated fairly with the consumer. If you want the details to just some of that legislation, then check out Credit Acts And Laws.

If you think that the 3 credit bureaus are all about you now that those laws are in place, then think again. In fact, since the government regulations have been passed, the three main credit bureaus have been penalized for violations to the tune of millions of dollars.

I’m certainly not a against a company making a profit. In fact, I’m all for it. But its very important for you to keep these basic details in mind when working with or listening to the 3 credit bureaus.