What is a credit bureau?

A credit bureau is an independent agency that researches, collects, analyses and organizes credit information primarily on consumers and small businesses (SMEs) and maintains and sells that information to lenders, lessors and other creditors in the form of a credit report.  Equipment lessors, mortgage lenders, banks, property managers, landlords, credit card companies and others can purchase reports on the credit history of prospective and current customers (lessees, borrowers, tenants, credit card holders); individuals can also obtain credit reports for themselves.

Equifax, Experian and TransUnion are the three major credit bureaus in the United States; the three credit bureaus in the UK licensed by the FCA are Callcredit, Equifax, Experian; Equifax Canada and TransUnion Canada are the two leading credit bureaus in Canada.  Although essentially the same information on consumers is collected by the competing credit bureaus, each may collect some unique data not captured by the others or store and display the same data differently.

The FICO scoring system is a proprietary credit scoring system that uses the information in a credit report that is assigned to five components categories: (1) payment history, (2) credit utilization, (3) length of credit history, (4) new credit, and (5) credit mix, each of which is given a different weight.  It is used by each of the three US credit bureaus and many credit bureaus internationally, from which lenders, landlords and other creditors request a credit score when evaluating the credit risk of a customer.  The FICO scoring system generates a similar result across the credit bureaus.  The scoring system used by the two Canadian credit bureaus – Beacon, Empirica or FICO Score – depends on which bureau issued the credit file and who purchases the report.