Ever wonder where your credit report comes from? The answer is simple: the credit bureaus. Equifax, Experian and TransUnion represent the three largest consumer credit reporting agencies in the U.S.
All three bureaus collect information about your financial accounts and use them to generate your credit report. The information in your report is then used to calculate your credit score, the three-digit number lenders use to make credit decisions.
But, your credit score with one bureau may not be the same as the other two. That’s because the three credit bureaus don’t always use the same information to create your credit report.
How credit reporting works
Equifax, Experian and TransUnion all rely on your creditors to report information about your financial accounts. That includes things like:
- Your payment history
- Account balances
- Credit limits
- Inquiries for new credit
- Types of credit you’re using
- Age of your credit accounts
These factors are what’s used to tally up your credit score. The credit bureaus also collect non-financial information, including your name, Social Security number, birth date, address history and employment history.
Why your Equifax, Experian and TransUnion credit reports may differ
While all three credit bureaus can track the same information, they’re not responsible for actually reporting it–your creditors are. For example, if you have a major credit card that account would likely show up on all three reports. But, if you have a personal loan with your local bank, they may only report it to one of the bureaus. Some credit accounts are never reported at all. There’s no requirement that creditors do so; the process is completely voluntary.
The credit bureaus can also differ with regard to things like how your employment data is reported. Equifax and Experian may just list your employer’s name while TransUnion may list your employer’s name, your position and your dates of employment. Keep in mind, however, that your employment history has no impact whatsoever on your credit score.
Differences in what’s included in your credit report concerning your credit accounts can directly impact your credit score. Your Experian credit score could be higher than your TransUnion or Equifax scores, for instance, if you have a positive payment history with a creditor that’s reporting only to that bureau.
Checking your credit reports
If you’ve never checked your credit before, it’s a good idea to consider reviewing your report from all three credit bureaus. That way, you can see where they overlap and where they differ in terms of what’s being reported and how that may impact your credit score.
As you check your report, also be on the lookout for any errors. If you successfully dispute an error, the credit bureau that reports it is required to remove or correct this information. And finally, remember to scan your report for accounts you don’t recognize, which could be a sign of identity theft.