Good question. The answer is we don’t need them. But unfortunately for us, creditors use them nationally to check an applicant’s credit qualifications, and creditors report to those “companies” about how we’ve handled our credit obligations with them. The three companies are Experian, Equifax and Trans Union, formally called “credit reporting bureaus”. All three provide both of those services to creditors; that is, they provide them with credit reports on us and take reports from them on how we’ve paid them.
Also unfortunately for us, we never know which of the three credit reporting bureaus any particular creditor will use to check our credit. They may use one or the other or all three. And sometimes creditors report to only one or the other, and sometimes all three. That’s why the three credit reporting bureaus may issue different credit reports that show different credit scores for the same person.
So, although we don’t need them, we need to know what credit score each bureau reports for us, and what each bureau says about us and about how we’ve paid our creditors. We need to need to obtain a free copy of our credit reports from them each year by going to annualcreditreport.com and we need to review those reports and dispute any information contained in them that is not accurate.
Although we don’t need them, or the different credit scores they report for us (one would do as far as we’re concerned), we need to know how the system works so we can deal effectively with them and make sure the credit scores they report accurately reflect how we’ve handled our credit accounts.