The Difference between the Three National Credit Reporting Agencies

Consumers sometimes maybe confused as to why there are three different national credit reporting agency’s and why their credit report and their credit score may differ from one to another.  The three main national credit reporting agency’s are Experian, Equifax and TransUnion.  These three national credit reporting agency’s compete to sell credit reports and provide other services related to credit to consumers all over the United States.  There is a fourth national credit agency that has recently entered this market called Innovis but it has not yet managed to expand its business and cover the consumer market with the same kind of comprehensiveness as the other three credit bureaus.

A fact that adds to the confusion is that there are also some local or regional credit reporting agency’s that work in affiliation with either of the three major credit reporting agency’s. they collect consumer data and record credit information in pretty much the same manner and similar database as the national credit reporting companies with which they are affiliated.  For someone who is not aware of this change of hierarchy the difference between the main credit agency and the local affiliate may be almost invisible.  However, these affiliate local credit reporting agencies are becoming fewer and fewer in number as they have been acquired by the main credit bureaus and being merged into their systems.  The question that arises in a computer consumers mine is that why cannot they be just one credit report coming from one national credit agency.  Credit reports and credit score though governed by the federal law and the rules set down according to the fair credit reporting act are profit-making enterprises.  They make money by selling credit reports and providing other services to consumer individuals as well as various lenders and creditors for whom credit rating forms the basis of decision-making when lending credit to the consumer.  No competition in this market would probably mean monopoly by a single enterprise which is never healthy to any market..  Having competition probably has a positive affect on this market as the various companies work harder to provide the most accurate data in their credit reports and the best customer service with the lowest pricing possible.  Since they are competing the system of collecting credit data is being constantly refined with additional services be added for the customers benefit all the tide.

The consumer probably ends up benefiting from the fact that there are three national credit agencies competing against each other in spite of the inconvenience that he might face with having to check the credit report and the credit scores from the three different national bureaus.  Checking your credit report from each different national credit agency becomes a requirement because different all three of them use different systems to collect data and calculate the credit score.  Because their competitors certain lenders may choose to report to 1, 2 or all three of them.  Since the data they have the record may differ depending on which lender is reporting to which your credit score may differ from one national agency to the other.  It is an important factor to remember that your particular credit score may only be valid that particular lender as there are thousands of credit scoring models being used in the market today each meant of some specific purpose such as mortgage, insurance, credit card etc.  It is possible that your credit may used specialized credit score for his purpose of making a decision on your credit worthiness.  However, credit scores under the same system such as FICO and VantageScore will always be the same no matter which source you get it from.

Though the national credit agencies are different and competitors in this market.  You should know that the legislation has made certain rules that require them to work together on certain grounds.  For example the national credit reporting agencies are supposed to share requests for security and fraught alerts and to maintain a jointly operated Internet site to allow consumers a single source to get their free credit reports every year.  Apart from this the national credit bureaus have worked together several years to set consumer assistant standards in order to be able to meet consumer needs and to build consistent practices.  Not all services are the same because as already mentioned the businesses are competitors and the systems, processes and policies have been developed separately.  But since credit is such a major aspect of living and lifestyle in the United States it has been realized by the government that consumer interest and assistance should not be compromised due to competitiveness in this field.  Which is why certain laws and regulations dictate that the three national credit bureaus work together on a few basic issues.