If you've applied for a loan on a great new home, it may strike you as curious that the people who have the biggest influence on whether or not you will get that loan are strangers to you, people who have never seen or even spoken to you. But such is the case in America. These matters are controlled by the big credit reporting agencies that gather financial information about you and assign you a credit score that will likely determine what loans, if any, you get.
Why Are the Three Credit Reporting Agencies Important?
You want a loan. You want to rent an apartment. You want a new credit card. Whether you can make these things happen depends on companies called credit reporting agencies. They gather information relevant to your financial situation and compile it into reports that culminate in your credit score. This number is likely to determine whether you'll get the loan, the apartment or the new credit card.
There is a trio of companies that are the major players in the credit bureau realm and have pretty much cornered the market on this business. They are: TransUnion, Experian and Equifax. Each company operates independently and makes separate decisions about what information affects your credit and for how long.
But, you might say, I never signed up with any of these companies! No, surely you didn't. Nobody does. Yet they hold more private and personal data about you – and millions of other Americans – than you can possibly imagine, including your address, phone number, Social Security number, credit accounts, payment history gathered from credit card companies, banks, mortgage companies, telephone and utility company accounts. And when one of their data banks gets hacked, as happened to Equifax in the none-too-distant past, a lot of very private information is at stake.
Read More: How to Get a Credit Report
What Is the Most Used Credit Reporting Agency?
Nobody picks out the credit reporting agencies they want to collect their information. This is done by all three agencies without the permission of the persons whose info is collected and reported. In terms of lenders, each may have its own favorite credit reporting agency and these are usually not made public. If it is time for you to check your credit score, you're best off checking all three credit reporting agencies. You can do this for free one time every year and demand corrections of incorrect information and data.
How Do I Find Out My Credit Score?
Your credit score is most often provided in terms of a FICO score. FICO stands for the Fair Isaac Company, a business that aggregates credit data and sells it to individuals and companies. Your FICO score will be a number between 300-850. It is issued by the Fair Isaac Company based on your credit record. A score over 700 is considered good credit.
To find out your score, pull your credit report from each of the three reporting agencies. Each can be accessed online, and you'll have to provide personal information like your Social Security number, in order to get your report. Your credit score will show up there. Alternatively, your bank may provide this to you regularly, free of charge.
The three major credit reporting agencies, TransUnion, Experian and Equifax, gather credit and financial information about individuals and prepare credit reports that can determine whether or not you get a loan.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.