Credit bureaus collect and analyze information related to a consumer's creditworthiness, which includes loans, open/closed accounts, past due payments, work history, public records, and more. There are three main credit bureaus in the United States — Equifax, Experian, and TransUnion, which are all private companies. While these agencies are not government-owned, they are regulated by The Fair Credit Reporting Act, which was passed in 1970. The Act ensures that consumers have accurate credit report information and are able to access their credit reports.
Lenders utilize the information from credit bureaus to make decisions about extending credit to consumers. Their decisions are often coupled with FICO scores. The better an individual’s credit and FICO score, the more likely they are to receive new credit and lower interest rates.