The biggest credit reporting agencies in the United States (and the world in fact) are Experian, TransUnion and Equifax. They aren’t the only ones out there by far and in fact there are literally dozens of smaller credit agencies that provide their clients (banks, lenders, etc.) with risk management services. But, in terms of how strong they are and how powerful their reach, Experian, TransUnion and Equifax are hands down the biggest and most powerful on the planet.
These 3 are the most powerful because they have the largest database of credit info in the entire country. Experian for example maintains the records of over 2/3 of the American population, over 215 million Americans, and the other 2 have similarly huge databases literally brimming with credit info on you, me and all of our neighbors and friends.
As credit agencies these 3 super agencies basically do 2 things; they collect credit info on Americans far and wide and they report this information to any lender who requests it. They do this for a fee of course and thus are 3 of the most profitable businesses in the United States.
They do this, for the most part, using three different methods of collecting information.
- Lenders and creditors send them updated info on all of their customers every month, depending on who they use. This includes a lot of info but the most important is what a person owes and what their payment history looks like.
- Any time you fill out a credit application for anything (car, credit card, home, etc.) ALL the info you give is sent to the big 3.
- They also have literally buildings full of people that do nothing more than scour public records for financial info on everyone.
The very lenders that send the big 3 your info are the same that request info when you fill out an application for a loan. You too can request this and in fact they must provide you 1 free copy every year. They share this info in a number of ways.
- When a request or inquiry is made.
- When positive events are reported. (Ex. You paid off your mortgage.)
- When negative events are reported. (Ex. You are late on your Macy’s CC payment.)
An inquiry can also be hard as when a bank asks for info or soft as when you or an employer asks for info. Also remember that not every lender reports to all 3 and that the info from 1 to the other 2 can be different. There are also instances when mistakes or discrepancies arise. (Hey, they’re only human.)