Experian and Equifax are top credit bureaus that gather and maintain the credit information of individuals and businesses. Credit bureaus like Experian and Equifax play a pivotal role in lending institutions. Credit bureaus will sell the information to the lending institutions with that information lenders will assess the creditworthiness of an individual and business.
What is a credit bureau?
A credit bureau is an organization that collects and maintains credit-related information. It collects information such as credit card usage (within the limit or not), a number of loans taken, overdraft facilities, and other credit-related information. Credit bureaus will have the credit report and credit history of an individual or business which determines the creditworthiness.
Credit bureaus collect information from banks, financial institutions, and other loan-providing entities. Credit bureaus sell the credit information to lenders which will help lenders to make decisions on an individual’s loan application process.
Top credit bureaus
Functions of credit bureaus
Credit score:
Credit bureaus will calculate the credit score of an individual or business and sell the information to the lenders. A credit score is a three-digit number that helps lenders to assess an individual’s creditworthiness. An individual with a higher credit score can get loans at better interest rates.
Credit report:
Credit bureaus will generate credit reports based on the credit history of an individual or business. Credit reports will be generated based on information such as payment history, payment defaults, number of days of default, and other credit-related information.
Fraud detection:
Credit bureaus will identify fraudsters by constantly monitoring their credit accounts. If they find any suspicious activity in the credit account of an individual or business, they will alert both the lenders and borrowers.
How do credit bureaus work:
Credit bureaus will make partnerships with lending institutions and credit card issuers they will share credit-related information to credit bureaus. With the collected information, they will generate the credit report. They will also calculate credit scores from the history of an individual or business. They will sell this information to their customers. Customers of credit bureaus include banks, financial institutions and also general consumers. Yes, consumers can become a customers of credit bureaus. They can collect their credit report from credit bureaus.
How do credit bureaus make money?
Credit bureaus will sell the gathered credit information to the lending institutions. Banks and financial institutions grant free credit information to the credit bureaus. Credit bureaus will interpret the gathered information into readable form.
Products sold by credit bureaus include:
- Credit services
- Decision analytics
- Marketing support
- Consumer services
Experian
Experian is one of the credit bureaus that will generate credit reports for an individual or business. The Headquarters of Experian is located in Dublin, Ireland.
Experian has more than one million customers. It gathers and compiles information about its customer’s credit history from various sources which includes banks, lending institutions, credit card issuers, and other financial institutions.
This information is used to generate credit reports and credit scores, which lenders use to assess an individual’s creditworthiness when they apply for credit, such as loans, credit cards, or mortgages.
Experian also offers other services related to credit monitoring, identity theft protection and fraud detection.
Equifax
Equifax is one of the top credit bureaus, which is similar to Experian. Equifax collects information from banks and financial institutions and interprets the data into readable form. Equifax’s headquarters are located in Atlanta, Georgia, and the United States. From the gathered information, Equifax will generate credit reports and scores which they will sell to the bank and other financial institutions. The services of Equifax include credit monitoring, identity theft protection, and fraud detection. Equifax generates FICO credit scores which are widely accepted in the United States.
Difference between Experian and Equifax
| Aspect | Experian | Equifax |
| Founded on | 1826 | 1899 |
| Headquarters | Dublin, Ireland | Atlanta, Georgia, United States |
| Data coverage | It covers global data | Comprehensive data coverage especially in the USA. |
| Data collection from | It collects data from traditional sources as well as from alternative sources such as rental payments, utilities, and telecommunications | It collects data from banks, credit card issuers and other lending institutions |
| Credit score | Experian generates FICO and Vantage credit scores, which assess a wider perspective of an individual’s creditworthiness | Equifax generates FICO credit score which is widely accepted in USA |
| Identity theft protection | Experian provides credit report monitoring, dark web surveillance, and identity theft protection | Equifax Complete Premier offers real-time alerts (if suspicious activity is found) and identity theft protection features |
| Dispute resolution | Online dispute resolution center with results online. Consumers can monitor the dispute resolution progress | Online dispute resolution platform with detailed instructions |
| Credit report price | Free annual credit report. Provides a wide range of credit services | Free annual credit report. Provides a variety of credit services |
| Mobile Application | Experian in which customers can access their credit report and scores | Lock and Alert which allows customers to access their credit reports and scores |
In conclusion,
Experian and Equifax, as leading credit bureaus, play vital roles in the financial ecosystem, assisting lenders in making informed decisions about extending credit. While both offer similar core services, their differences lie in their data coverage, credit scoring models, and identity theft protection features. By understanding these distinctions individuals and businesses make informed choices about their financial well-being and protection.
FAQ:
Are Equifax and Experian the only credit reporting agencies?
No, there are various other credit reporting agencies such as Transunion and CRIF Highmark. The two biggest credit reporting companies are Equifax and Experian.
Can an individual get a credit report from both Equifax and Experian?
Yes, an individual can get their free credit report once in a year from Experian and Equifax.
Are Equifax and Experian regulated by any Government agency?
Yes, both Equifax and Experian are licensed by the RBI (Reserve Bank of India).
Can Equifax and Experian improve credit scores?
Equifax and Experian will provide educational resources and tools to improve the credit score. They will guide you to improve your credit scores.
