Credit bureaus - the silent overseers
Do you feel like some is watching your? Go with the feeling.
On July 16, 2012, the Consumer Financial Protection Bureau (CFPB) adopted a rule that established a program to oversee reporting agencies at a federal level. Since that rule took effect on September 30, 2012, that oversight included the three big national credit reporting companies as well as other companies involved in credit reporting. According to the Fact Sheet: Credit Reporting Market, “the CFPB will assess compliance with federal consumer financial laws as well as detect and assess additional risks to consumers.”
At the time the CFPB was established as overseer, there were approximately 400 consumer reporting agencies. That number is rather eye-popping! Experian, Equifax and TransUnion are at the top of that list of reporting agencies. Many of the other consumer credit reporting agencies are resellers of credit information, specialize in specific types of credit information or analyze credit report data. (In case you are curious about the other companies and industries they serve, you can review the January 2025 report issued by the CFPB here). Ready for another eye-popping number? Those three credit bureaus handle over 1.6 billion credit accounts among them.
A March 25, 2025 blog post from Norton has a great, simple graphic that explains how financial information is collected in a consumer’s credit file. (What are the 3 credit bureaus and why do the matter?, Oliver Buxton, March 25, 2025). Every part of a consumer’s credit life cycle is captured in their credit file – from initial hard inquiry for a credit application to closure of the account. Lenders, debt collectors and other financial institutions provide that data to the credit bureaus which is available for requesting users, including the primary consumer. The data in those reports directly contribute to companies deciding whether to approve or deny consumers for a credit product, offer employment opportunities, insurance coverage rates, and approving a lease application for residential housing. For all the reasons we have previously discussed, consumers should keep an eye on their credit report to ensure that all the collected information is correct.
Now consider this. There is a 4th credit reporting agency that is becoming more and more popular. Innovis offers the same services to consumers as the main three. Those services include the ability to: request a credit report, request a freeze on their credit file and submit a dispute for reporting errors. One main difference is that a consumer cannot request their Innovis credit report through www.annualcreditreport.com. They must request it directly from Innovis via website, phone or mail. The Innovis personal services webpage can be accessed here.
If you are requesting your credit report for the first time, or you have a reminder on your calendar to pull it every quarter, understanding who the main consumer credit agencies are and how your credit information is collected and used will only help you now and in the future.
50/70/100 principle. Questions can be uncomfortable; answers can help you move towards your goals; reaching out to a financial coach is the necessary first step. StudioM Financial is here to help. Reach out at letstalk@studiomfinancial.net or (469) 615-0387. Until we meet, keep working on the change.