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Articles » What Is A Good Credit Score | | What Is The Correlation Between The 3 Credit Bureaus? |
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The current system of three major credit bureaus actually had its beginnings back in the 1860’s, when investigative services were formed to check out customers who were seeking credit from local merchants. In 1906, several of these bureaus formed an organization called the Associated Credit Bureaus. The ACB was the organization that came before the FTC and served as the regulatory and watchdog agency. They monitored fraud, risk management, collections and check verification that were being recorded by the credit bureaus. There are still to this day dozens of these credit bureaus out there but it’s the big three that have taken over as the go to source for lenders when it comes to personal credit histories.
Equifax is the oldest of the three bureaus. It was originally formed in 1899 and was called the Retail Credit Company. They changed their name in 1975. TransUnion was founded in 1968 by Union Tank Car as their holding company. They have expanded rapidly by buying up other, smaller credit bureaus. Experian was founded outside of the United States in Nottingham, England as CCN Systems. It first began operations in 1980, but became part of the United States credit market in 1996 when they purchased TRW Information Systems.
The big three are not the only credit bureaus in the United States, but they are the largest and the credit bureaus that lenders will most often look to for credit reports on prospective customers . They are regulated by the Fair Credit Reporting Act of 1970 and each of them has a scoring system put together by Fair Isaac and Company (FICO Score) that has become the industry standard for determining poor or good credit worthiness.
Each of the credit bureaus is a private company which was put together originally as an investigative service. They are not government agencies and do not exist to serve the consumer. They gather information and sell it to lenders and others and they make billions doing it. Recent changes in federal law have made the credit reporting process more accessible to the average consumer, including a requirement that each of these credit bureaus supply you with a free credit report once a year . These reports are individual and separate from one another, so any changes made to one are not necessarily reflected on the other two. If you dispute and entry with one credit bureau, you will most likely have to contact the other two also to have information added or removed.
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