Having good credit can make your situation a lot easier if you need to take out a loan, get a mortgage, or apply for a credit card. Having a good credit score increases your chances of obtaining a low-interest rate with lenders.
Some of the main determining factors that contribute to your credit score include the types of accounts, length of credit, payment history, and credit utilization.
There are 3 major credit bureaus that you’ve probably heard of already: Experian, TransUnion, and Equifax. Have you ever wondered what the difference was between these three? Is one better than the other?
There is no sole official federal credit bureau. Instead, each of the 3 major credit bureaus operates as a for-profit company different from the others. All are slightly different but have one common goal: determine your credit score and your eligibility for so many things in life.
What Type of Data is on my Credit Report?
All credit bureaus don’t produce the same credit score, but the information collected is generally the same. All reports should accurately report your name, addresses, date of birth, and social security number. The data that may differ on all the reports include your age of credit history, type of accounts, credit utilization, and derogatory marks (foreclosures, bankruptcy, and tax liens etc).
Overview of the 3 Major Credit Bureaus
Lenders use to consider creditworthiness based on word-of-mouth referrals and experiences from merchants. Things have changed definitely changed since then and now there are multiple credit bureaus that use systems to determine creditworthiness. The most trusted credit bureaus to date are Experian, TransUnion, and Equifax.
Equifax was the first one founded back in 1899 by Cator and Guy Wolford in Atlanta, Georgia. Equifax first went by the name Retail Credit Company.
TransUnion formed in 1968 as a holding company for Union Tank Car Company, a railroad leasing organization. In 1969 they changed direction and bought the Credit Bureau of Cook County. In the beginning, the main focus on this company was to maintain 3.6 million different files kept in 400 seven drawer cabinets and expanded from there.
Experian, who originally handled reports for the Western United States, has now grown to nearly 16,000 employees between 39 countries including a corporate headquarters in Dublin, Ireland.
The major credit bureaus collect the same data – the difference is they process the information differently. Here are some of those key differences.
Experian
Free Yearly Credit Score: AnnualCreditReport.com
Score Types: Fico and Vantage Scores.
Services: Experian Credit Tracker is a monthly service offered by Experian and it includes email alerts, fraud resolution, daily credit monitoring, and a support hotline.
TransUnion
Free Yearly Credit Score: Annualcreditreport.com
Score Types: Fico and Vantage Scores, company-specific educational scores, and business scores.
Services: TransUnion Smart Move helps smaller property managers and landlords to do a tenant screening. Smart Move is a soft inquiry for consumers, that will be sent directly to the landlord when the credit report is ready.
Transunion collects data about your employment, including your employer’s name, your job title, and the dates you were employed. The other two major bureaus mostly just have your employer’s name.
Equifax
Score Types: Fico and Vantage Scores
Services: Equifax Complete is a monthly credit monitoring service that also offers credit reports and credit freeze alerts.
Summary
Credit scores are important factors in getting to know a consumer’s worthiness and the 3 major credit bureaus have slightly different views determining what the actual score is.
They figure this out and pass it along to the lender, insurer, employer, landlord etc seeking that information. Keep on eye on your score, and do your best to build and maintain a high score if you are looking to open a new line of credit in the future.
Do you have a favorite credit bureau? Which one do you use most to check your credit score?
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