The 3 Major Credit Bureaus and How They Work
The three top credit bureaus have a major influence over nearly every consumer, yet many people aren't really aware of who these companies are and what they do. Equifax, Experian, and TransUnion are for-profit companies that have carved out a unique niche in the financial industry.
A credit bureau, also known as a credit reporting agency, collects financial information about consumers and pulls this information together into a single report -- namely, your credit report. Because the credit bureaus operate independently of each other, the credit report that one bureau generates for an individual may be slightly different from the other bureaus' reports. While there are many smaller credit bureaus, the three major ones control the lion's share of this market.
The credit bureaus have an interesting profit model. Banks, lenders, and many other companies share information about their clients with the credit bureaus at no charge. The credit bureaus then compile this information and sell it, in the form of credit reports, to various parties that need some insight into your financial history -- lenders, insurers, potential employers, landlords, and more.
Source: Fool.com
