Credit bureaus or credit reporting agencies are companies that collect information on individual credit history and financial relationships. Credit bureaus provide access to credit reports for consumers, creditors, and other organizations as allowed by law. Credit bureaus are also known as credit reporting agencies or consumer reporting agencies (CRAs).
The information collected by credit bureaus is used to determine creditworthiness by creditors. There are three major credit bureaus in the United States which are Experian, TransUnion, and Equifax.
These companies do two things: compile credit histories on prospective borrowers and provide credit reports to lenders. A credit bureau may collect information from banks, credit unions, financing companies, credit card companies, and others who may provide credit to you.
Information in a credit report may include payment habits, number of credit accounts, the balance of accounts, and length and place of employment. Lenders use these reports when making decisions on extending credit.
Credit bureaus collect individual credit information and sell it for a fee to creditors. Creditors can then make a decision on granting loans. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies.