Getting to Know the Three Credit Bureaus

When we talk about credit or pulling our credit score, it makes most of us a little uncomfortable. We often don’t know what we will find or what new surprise is there to greet us. Not long ago, consumers didn’t even have access to their credit reports; only lenders did when determining your creditworthiness.

Thankfully that has changed. The credit reporting industry’s inception was in 1899, and it remained virtually unregulated until Congress passed the initial Fair Credit Reporting Act in 1970. Since then, dents, including consumer rights and protections, passed in 2003.

“What is a Credit Bureau? The credit bureaus are agencies that hold billions of credit histories on consumers and commercial entities. The credit reporting agencies provide the data lenders use to determine an individual or entity’s creditworthiness.

The Three Big Credit Bureaus are Equifax, TransUnion, and Experian. There were over 1,000 credit bureaus locally and regionally in the United States; however, the big three bureaus, over time, bought or contracted with all the smaller agencies until we were left with just three.

Do you know you have a different credit score from each agency?

Yes, that’s right, your credit score is not the same with each credit bureau. Each agency uses its mathematical formula to calculate your credit score. Your score can vary by up to 40 points between the three.

Experian uses “The Plus Score” as its scoring method. Equifax uses the “Credit Score,” and the TransUnion method is the “TransRisk.” The higher your score, the lower your credit risk. These methods are similar to the Fair Isaac Corporation (FICO) score, which ranges from 850.

Understanding your credit will help to remove some of the anxiety we all feel when we think of our credit score and the impact it can have on our life. Real Credit Deal has a team of credit experts that can help you better understand the report, which can help you improve and maintain your credit standing.

Allow us to help you understand how you can manage your accounts and be able to sustain your credit. If you or someone you know has questions about their credit history and how to correct inaccurate, unverifiable, or incomplete items on their credit report. Or, if you would like to learn more about credit improvement and repair services, Real Credit Deal is here to help you.