Credit bureaus, also known as credit reporting agencies, collect the information that determines credit reports and scores, but who are they? There are three major credit bureaus that handle massive amounts of consumer financial information. All three bureaus are privately owned companies governed by the Fair Credit Reporting Act.
Founded in 1899 in Atlanta, Georgia, as the Retail Credit Company, Equifax is the oldest and largest credit bureau in the United States. The company collects information on more than 800 million consumers around the world. In total, it brings in more than $3 billion in revenue every year. In addition to its data services, Equifax also sells credit monitoring and fraud services to consumers.
In 1970, Equifax looked to computerize its records on individuals and businesses to make this information more widely available. The move ultimately led to the drafting and passage of the Fair Credit Reporting Act. The company officially changed its name from the “Retail Credit Company” to “Equifax” in 1975 following congressional hearings regarding the computerization of records.
More recently, Equifax was the subject of a major cyber-security breach. The 2017 breach allowed hackers to access more than 145 million consumers’ personal data. The company also confirmed that more than 200,000 consumers had their credit card credentials stolen. The theft is one of the largest data breaches in history.
TransUnion was originally founded as a railroad leasing organization in 1968. The company traded hands multiple times before Goldman Sachs Capital Partners and Advent International acquired the business in 2010. TransUnion is the smallest of the three credit bureaus and maintains information on nearly every credit-using consumer in the United States. It became a publicly traded company in 2015.
The company has offered various products to both businesses and consumers over the years. TransUnion maintains individual consumers’ credit history and offers businesses access to trended data that predicts repayment and debt behavior.
In June 2017, a California jury awarded $60 million in damages to consumers who were falsely reported to the government as a security threat. The information stemmed from TransUnion data. The $60 million verdict is the largest Fair Credit Reporting Act ruling to date.
Experian is the youngest of the three credit bureaus. Founded in 1996, the company handles the information of more than one billion consumers around the world. Experian sells decision and marketing analytic assistance to businesses as well as fraud and identity theft protection to consumers.
In 2005, the Federal Trade Commission charged that Experian had violated a previous settlement with the federal agency. Allegations stated that Experian failed to disclose that consumers who accessed their annual free credit report would also be enrolled in a costly credit-monitoring program.
Following a 2015 data breach, Experian revealed that 15 million people may have had their private information stolen. Two years later, in 2017, the Consumer Financial Protection Bureau fined Experian $3 million for providing consumers with false credit scores.
Although the three credit bureaus play a major role in consumers’ financial lives, it isn’t often consumers have to directly interact with them. Even so, it’s important to know the companies that collect and sell personal and financial information. Fortunately, the Fair Credit Reporting Act draws a line that helps ensure consumer data doesn’t fall into the wrong hands.