If asked “how many credit bureaus are there in the United States”, most people would answer three: Experian, TransUnion, and Equifax. But the big three are just the tip of the iceberg. There may be hundreds of credit bureaus in the U.S. who may be collecting, storing, and disseminating personal financial information.
The number of credit bureaus may be important to consumers concerned about personal privacy, or anyone who desires insight into how institutions use their information to facilitate transactions. There are five different categories of U.S. credit bureaus that you might encounter:
- National consumer bureaus
- National business bureaus
- Regional and affiliate bureaus
- Collection bureaus
- Medical information bureaus
National Consumer Credit Bureaus
In addition to the three most prominent bureaus (Experian, Equifax, and TransUnion) there are several other national bureaus that may collect, store and disseminate your personal financial information. While the big three dominate the traditional market, other players complete by offering complementary services for lenders.
Innovis is considered the fourth national U.S. consumer credit bureau. Innovis began life as Associated Credit Bureaus before going through several name changes and ownership changes. Their competitive advantage was a broad file of negative or derogatory information. Today, they offer a range of supporting services: verification, flood zone determination, appraisal services, and more.
Pay Rent Build Credit (PRBC) tracks how consumers manage apartment rentals, gas and electric bills, cell phone and cable bills, and more. It enables consumers with short or thin credit histories to open accounts with similar providers. PRBC is the largest national bureau focusing on alternative data. There are many more too numerous to list.
National Business Credit Bureaus
Business credit bureaus may impact your life if you ever decide to start a business, or if you already own one. Banks may check a business report when making a loan, and suppliers often want to see a history of business payments before shipping product on terms.
Dun and Bradstreet is the acknowledged leader in this space. D&B collects third party trade information, and utilizes agents to inspect business locations, and interviews business principals.
Credit.net/infogroup is now the second largest business credit bureau. They recently purchased the business credit reporting division from Experian, which had been the number two provider until divesting the business unit after the financial meltdown in 2008.
Regional and Affiliate Bureaus
There may be hundreds of regional and affiliate bureaus. Each of these bureaus is an independently owned and operated business that collects and stores consumer lending information, but disseminates the data through one or more of the three national bureaus: Experian, Equifax, or TransUnion.
A quick history lesson reveals why these companies still exist with so little visibility. Back in the 1960’s before the advent of the information age, there were thousands of local credit bureaus that maintained paper-based credit files collected from lenders in a local community. Lenders would use the local bureau it perceived had the most complete credit histories for borrowers in their local area.
As time went by computing power increased, and the industry began to consolidate, but not completely. The national bureaus now manage the data collection efforts from national lenders, and utilize call center operations to manage mid-size lenders. But there still is a need for a local presence to manage the data collection from smaller local lenders.
You may find the hundreds of local credit bureaus that serve a limited geographic area. They may collect data that is shared exclusively with one of the big three – explaining one part of the equation for why your three FICO scores vary.
Many of the regional bureaus have evolved into collection agencies. They began life collecting, storing, and disseminating credit information, but as the national bureaus assumed more of that role, they migrated their business to debt collection.
These bureaus now collect past due information from lenders, but now also from medical practitioners: doctor offices, and hospitals. They collect the data from any business that has a receivable, they store these data on their computer systems, and often report the past due balances to the big three bureaus. These data are used to collect the past due balances from debtors.
Many of these collection agencies use “Credit Bureau” in their name – Credit Bureau of ____________. Substitute the city or state name in the blank line.
Medical Information Bureaus
The Medical Information Bureau is a non-profit member organization that collects stores and shares underwriting information for use by health and life insurers. The data are used to determine an individual’s risk when applying for life, health, disability income, long term care, and critical illness insurance policies.