credit reporting agency
A credit reporting agency (also referred to as a credit bureau or credit agency) is a private company that creates credit reports and credit scores indicating the creditworthiness of each person or corporation. It does so by collecting and selling information about a person or corporation’s identifying information, debt information, history of credit inquiries, and payment history from various sources. These sources include, but are not limited to, financial institutions, debt collection agencies, and public records such as bankruptcy filings, as well as potential exchange of information between two credit reporting agencies. Credit reports are sold to qualified extenders of credit or to those for whom a would-be debtor has executed a release. Credit reports and scores are used by banks, mortgage lenders, credit card companies, landlords, and potential employers to screen applicants.
The three major credit reporting agencies, Equifax, Experian, and TransUnion, are regulated by the federal Fair Credit Reporting Act. Yet, it should be noted that while Equifax, Experian, and TransUnion remain the three largest credit reporting agencies in the United States, they are not the only credit reporting agencies. The Consumer Financial Protection Bureau (CFPB) offers a comprehensive list of credit reporting agencies. (See: List of Consumer Reporting Companies) Some of them, among others, may exclusively focus on one area, such as employment screening for potential employers, while others may focus on tenant information serving prospective landlords, such as history of evictions.
Credit reporting agencies operate under the Fair Credit Reporting Act (FCRA), which is Title VI of the Consumer Credit Protection Act. The Consumer Financial Protection Bureau (CFPB) oversees credit reporting agencies.
[Last reviewed in December of 2024 by the Wex Definitions Team]
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