What are Credit Reporting Agencies?

Credit reporting agencies (CRAs) are for-profit organizations that keep track of your credit history and report on these details to potential creditors, employers, insurance companies, lenders and landlords. They may also be referred to as credit bureaus. It is important to regularly check your credit history to be sure the information is correct and your credit scores are as high as they can be.


There are three primary credit reporting agencies that keep track of your credit history and provide a Fair Isaac Corporation (FICO) score to potential lenders. These are TransUnion® Experian℠ and Equifax®. You are entitled to one free credit report per year from each agency, though FICO scores are not free. FICO scores can be received for what is generally a nominal fee. It is important to check all three credit reports from each credit bureau, because each one can contain different information.

The annual free credit report can be ordered online, by mail, or by phone. You are also entitled to receive a credit report if you are denied a loan due to negative information found on the report. If you find any errors on your credit report, you can then begin to take steps to resolve them. Equally importantly, if you have negative information on your credit report, you can learn how to improve your money management skills, such as paying bills on time and keeping balances on credit cards at a low or zero balance.

Though there are other, smaller credit reporting agencies across the country, the three mentioned above are known as the "Big Three." Each month, these companies collect information on your debts, payment history, credit inquiries, and types of credit you hold to update your credit history and your three-digit FICO score. Credit reporting agencies also collect information from court records, such as a bankruptcy or foreclosure. These major negative events can affect your credit report for seven to ten years. Maintaining positive information, such as making all your payments on time, is equally important as removing negative information.

The purpose of credit reporting is to signify to lenders and other potential people you may do business with that you are a responsible person and a good credit risk. The information found on your credit report will also affect the interest rate you receive if you are granted a loan, which could end up costing you a significant amount of money over the long term. It is simple to receive your annual credit report from the three major credit reporting agencies, and should be something you do every year to be sure the information is correct and to prevent identity theft.

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