What is a credit bureau?
Credit bureaus collect information about your financial affairs and sell that information to their business members, such as credit grantors, employers and insurance companies. Typical clients include banks, mortgage lenders and credit card companies that use the information to screen applicants for loans and credit cards. There are three major credit bureaus, Equifax, Experian and Trans Union, and they are regulated by the federal Fair Credit Reporting Act.
A credit bureau is a clearinghouse for credit history information. Credit grantors provide the bureau with factual information on how their credit customers pay their bills. The bureau assembles this information, along with public record information obtained from courthouses around the country, into a file on each consumer. In return, credit grantors can obtain credit reports about consumers who wish to open accounts with them.
