Perhaps you've heard of the three major credit reporting agencies (also sometimes referred to as credit bureaus). They are Experian, TransUnion and Equifax. But there's a lot of confusion when it comes to what these credit bureaus actually do. What kind of information do they collect? Where does that information end up? Do they create credit scores or credit reports? And what's the difference?
Credit reporting agencies collect and maintain the information that forms your credit history and ultimately, your credit report. That includes information about your existing credit accounts as well your payment history from a variety of financial institutions, including credit card companies, banks, mortgage companies and other lenders. Other businesses, like telephone and utility companies, also report information to credit bureaus. (Generally, though, these non-lending organizations only report late payments and other negative information).
These companies are all for-profit private companies and they do not share information with each other. That means each one may maintain somewhat different information about you.
Personal information - like your name, address, etc - as well as positive information (like the age of your various credit accounts) can remain on your credit reports indefinitely does not have a fixed expiration date. Most negative information remains on your credit report for 7 years. Here's how long the negative information collected by the credit bureaus is likely to stay on your credit report:
Once they've collected the information, compiled your credit history, and generated a credit report, the credit reporting agencies sell that information back to the lenders, so that they can determine your creditworthiness. Based on that information, lenders can decide whether or not to lend to you, and if they do, what your interest rate should be. They may also sell that information (i.e. your credit report) to insurance companies, employers, and any other company that has "permissible purpose" to access consumer credit data. You are also able to see your credit reports either by purchasing one from one of the credit reporting bureaus or for free once a year from AnnualCreditReport.com, and federally mandated site. In addition, Credit.com's Credit Report Card provides you an easy-to-understand overview of your credit history, along with your free credit scores.
The information in your credit reports is used to generate your three digit credit scores. Since there are three credit reporting bureaus, and the information collected by them can vary from bureau to bureau, your credit scores may also vary depending in which bureau they are using to ascertain your credit history. Beyond that, there a many different credit scoring models or formulas, which change from lender to lender. In fact, you've probably heard of FICO scores before - but you don't have just one FICO score - you have dozens!