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The U.S. credit reporting industry consists primarily of three national credit reporting agencies (CRAs) that maintain a wide range of information on approximately 200 million consumers. Creditors and others voluntarily submit information to these centralized, nationwide repositories of information. This information is then consolidated into consumer reports and credit reports. Users of credit reports analyze the data and other information to assess the risk posed by credit applicants, often using sophisticated predictive models called credit scores.
This flow of information enables credit grantors and others to make fast and generally reliable decisions about a consumer's eligibility for various products and services, allowing consumers to obtain credit within minutes of applying. The CRAs obtain records related to consumers' credit history from data furnishers including creditors, collection agencies, and public sources. There are roughly 30,000 data furnishers that provide this information on a voluntary basis. Each record is attached to identifying information such as name, Social Security number ("SSN"), address, or birth date. The CRAs organize these records into "files," which refer to all data that the CRA believes belong to the same person. The CRAs attempt to maintain exactly one file for every credit-using consumer and to include as many of that consumer's accounts and other records in the file as possible.
Subscribers may be the final users of consumer reports, or they may be "resellers," entities that purchase consumer reports from the national CRAs and sell the information to final users. In addition, these subscribers may or may not provide information about their own consumers to the CRAs. Most large banks and finance companies furnish information about their credit accounts to all three of the national CRAs, though they may be a subscriber of only one CRA.
Consumer information maintained by the national CRAs can be divided into five general categories: (1) Identifying information including name, address, birth date, SSN, and previous/alternate names and addresses; (2) Credit account information including information about current and past credit accounts such as mortgages, car loans, credit cards, and installment payments; (3) Public records such as bankruptcies, foreclosures, civil judgments, and tax liens; (4) Collection accounts, which include unpaid debts (such as medical bills) that have been turned over to collection agencies; and (5) Inquiries (s ubscriber requests to access a consumer credit report).
In many cases, when a subscriber requests a consumer's credit report, it also receives a credit score that summarizes the consumer's credit history. There are many different types of credit scores in use today. Each of the national CRAs offers a variety of scores, such as scores that measure general creditworthiness, scores that are specific to certain types of credit such as auto loans or mortgages, and credit-based scores used to measure risk for auto or homeowners insurance, default risk, or bankruptcy risk.
- Report to Congress Under Section 319 of the Fair and Accurate Credit Transactions Act of 2003, at 1-3.