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How Did Three Credit Agencies Gain a Monopoly?


The practice of extending credit dates back to the 19th century when industrialization led to the mass production of expensive machines that most consumers were unable to afford in a single payment. Credit reporting agencies were created as credit became more widely used. The oldest of these reporting bureaus that is still around today is Equifax (formerly Retail Credit Company, founded in 1899). The agency reported all kinds of information on consumers to those who paid to see it, including political activity, criminal convictions, marital problems, and more. For most of the 20th century, these reports contained only negative information, and consumers had no rights to look into a file. It wasn’t until 1971, with the passage of the Fair Credit Reporting Act, that things began to change.

Why Are There Only Three Large Credit Reporting Agencies?

One of the most important reasons why there are only three major credit reporting bureaus is that throughout the first part of the 20th century, many companies scattered throughout the country acted independently due to geography. With an increase in commerce and transportation of goods, there eventually arose a need for more centrally located information collecting centers. Larger organizations were formed when many smaller companies consolidated. The three companies that emerged at the top are Experian, TransUnion, and Equifax.

Credit Reporting Agencies are Not Government Sanctioned

Interestingly, the agencies’ use of the word “bureau” is a misnomer, as bureau seems to point to government involvement. However, it is important to remember that these agencies are not government sanctioned, nor are they in existence to help consumers. Many people erroneously assume that if they correct an error through one agency, the mistake will be fixed at all three through an automatic exchange of information. This is untrue, as the three agencies operate as separate businesses. A consumer who wishes to correct an error must file separate dispute claims with each agency.

Call a Chicago Consumer Advocate at (312) 313-1613

If you believe that your consumer rights have been violated under the Fair Credit Reporting Act, it is important that you take action right away. Errors on your credit report could potentially have harmful effects on your ability to obtain a loan, open new credit, find a job, and more. When you seek the assistance of Atlas Consumer Law, your attorney fees will be paid by the at-fault creditor, so you can feel confident that you won’t be held responsible for the financial implications of someone else’s mistake.

Our firm is well versed in handling cases involving FCRA violations. To consult with an experienced Chicago consumer lawyer, please contact us today.