What are credit bureaus? A guide to Equifax, Experian, and TransUnion.

When it comes to your credit, there are three big names you should know: Equifax, Experian, and TransUnion. These nationwide credit bureaus gather the details of your debt and assemble them into documents known as your credit reports.

Any time you apply for a new credit card or loan, the creditor will pull a report from one or more of these bureaus to determine if you qualify, and at what interest rate.

As a financial educator and former NFCC-certified credit counselor, I’ve learned that many people are confused about what these three credit bureaus do and why it matters. So here’s all the information you need to clear things up.

A credit bureau — also known as a consumer reporting agency (CRA) — is a company that compiles information about your borrowing and repayment history. Their job is to gather data from creditors and then use that information to create your credit reports.

Here’s what that means in practice:

• Information is voluntarily reported to the credit bureaus by creditors and debt collectors, usually on a monthly basis.

• The credit bureaus assemble the information they receive into credit reports.

• The bureaus provide credit reports to companies upon request. This includes banks, landlords, insurance companies, and agencies that want to calculate your credit scores.

Experian, Equifax, and TransUnion are the largest nationwide credit bureaus. Their main function is to collect information about consumer debt and assemble it into credit reports.

Keep in mind that each bureau collects its own data. So, your credit reports and scores may look slightly different across them.

It’s also important to note that the credit bureaus do not make decisions about whether you qualify for loans and credit cards. Instead, it’s up to the creditor to determine if you meet their unique requirements. Creditors do this by reviewing your personal information, which usually includes your credit reports, income statements, and employment history.

Read more: 7 credit score myths you should stop believing

Thanks to the Fair Credit Reporting Act (FCRA), you have the right to access your credit reports for free and ensure they reflect correct information.

The FCRA, which was passed in 1996 and has been amended several times, promotes “accuracy, fairness, and privacy of information in the files of consumer reporting agencies.” These are some of the consumer protections and guarantees we all get to enjoy because of the FCRA:

• Consumers have free access to their credit reports through AnnualCreditReport.com.

• If you’re denied credit based on the information in your reports, the creditor has to give you a notice explaining why.

• Most negative information in your reports has to be removed after seven years.

• If you find an error in your credit reports, you can file a dispute for free. The credit bureaus have to investigate disputes and correct any errors.

There are other ways this act helps protect consumers too. In 2023, for example, the Federal Trade Commission (FTC) brought action against TransUnion for violating the FCRA by not ensuring that information supplied to landlords for tenant background screenings was correct. As a result, TransUnion had to pay $5 million in civil penalties and take steps to prevent future errors.

You can pull copies of your credit reports from each of the three bureaus for free once per week by visiting AnnualCreditReport.com, the only source of free reports authorized by the federal government.

You can also qualify for an extra copy of your credit reports for free under special circumstances, including the following:

• You’ve placed a fraud alert on your credit reports.

• You’re receiving public welfare assistance.

• You’ve been turned down for new credit or insurance in the past 60 days.

Want to check to see if your minor child has a credit report? If your child is 14 or older, they can use the website linked above to request their own reports. Younger children shouldn’t have credit reports unless they’ve been victims of identity theft. To request reports for children under 14, you’ll need to contact each of the credit bureaus by mail.

Read more: How to check your credit score for free