Credit Advice

Why there are three credit reporting companies


Have a question?

Do you have a question about consumer credit? You may find an immediate answer by using the search engine. If you can't find what you're looking for, please fill out the form, being as specific as possible.

Please note: The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future column.

Our policies
The information contained in this column if for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation.

Please understand that Experian policies change over time. Column responses reflect Experian policy at the time of writing. While maintained for your information, archived responses may not reflect current Experian policy.

Credit Advice

Why there are three credit reporting companies

Dear Experian,

Why are there three credit reporting companies? Why can't there be just one? They all, apparently, do the exact same thing. So, what's the rationale for having three?


Dear OJO,

History is primarily responsible for there being three credit reporting companies.

Credit reporting first appeared more than 100 years ago. Then, individuals went from merchant to merchant in a town or city taking notes about how individuals repaid their debts. The merchants could than ask for credit references based on the notes in the local credit bureau files.

Eventually, credit reporting expanded, automated, and consolidated into three regional credit reporting companies. Experian, then TRW, evolved in the west and is now based in Costa Mesa, California. Trans Union, based in Chicago, grew in the central United States, and Equifax, in Atlanta, dominated the south and east.

With the advent of the computer, the three regional credit reporting companies all gained national scope and became competitors. While doing basically the same things, there are differences in the way each functions, the ancillary services they provide and how they work with customers, both business clients, like banks, and individual consumers.

An unlikely but relevant comparison is to the big three auto manufacturers – Chrysler, Ford and General Motors. All three produce cars and trucks, which are essentially the same in function. However, there are differences in the vehicles each company produces and in the way they interact with their customers that cause fleet operators and individual consumers to prefer one brand over the others.

While having several companies that “do the same thing,” many economic scholars argue that competition is better than a single-company monopoly because it fosters innovation in products and services and promotes lower costs and better customer service. I tend to agree.

Thanks for asking.


- The "Ask Experian" team

  • © 2016 Experian Information Solutions, Inc. All rights reserved.