How Many Secondary Credit Bureaus Are There?

Credit bureaus collect and maintain consumer credit data. They compile financial histories into credit reports, which are then used by lenders and other businesses to assess an individual’s financial reliability. This information influences decisions ranging from loan approvals to insurance rates and housing applications.

Primary vs. Secondary Credit Bureaus

Credit reporting involves both primary and secondary credit bureaus. Primary credit bureaus, often called the “Big Three,” are Experian, Equifax, and TransUnion. These major bureaus collect a broad spectrum of financial data from banks, credit card issuers, and mortgage lenders, compiling it into comprehensive credit reports widely used by lenders.

Secondary credit bureaus, also known as specialty or niche agencies, focus on collecting more specialized or alternative data. Unlike primary bureaus that track traditional credit accounts, secondary bureaus gather information relevant to specific industries or types of transactions. Their existence and number are more fluid and extensive, reflecting a diverse array of agencies.

Prominent Secondary Credit Bureaus

Secondary credit bureaus are diverse, with numerous agencies specializing in distinct types of consumer data. These bureaus provide information that complements primary credit reports. Their specialized reports are used for specific purposes, such as tenant screening, employment background checks, or assessing risk for alternative lending products.

FactorTrust focuses on performance information related to non-prime customers, including short-term loan payment histories and data from installment lenders. Clarity Services, Inc. collects information about banking habits and subprime debt. These bureaus create predictive credit models for lenders who cater to consumers with less traditional credit profiles. The National Consumer Telecom & Utilities Exchange (NCTUE) gathers data on telecom and utility accounts, including payment histories and charge-offs. This information is used by utility providers and telecommunications companies to determine service eligibility and whether deposits are required.

LexisNexis Risk Solutions provides comprehensive reports used for insurance underwriting, employment screening, and fraud prevention, compiling data on insurance claims, public records, and other consumer behaviors. MicroBilt Corp. compiles data on recurring bills like streaming services, utilities, and rent, providing this information to providers of rent-to-own services and short-term loans. Blend Insights collects employment and income verification data, along with asset verification from bank accounts, to assist lenders in making approval decisions.

Data Utilization by Secondary Bureaus

The specialized data collected by secondary credit bureaus is used in various consumer scenarios, influencing access to services and financial products. Landlords frequently utilize tenant screening reports that compile rental payment histories and eviction records, allowing them to assess a prospective tenant’s reliability beyond traditional credit scores. Employers also use reports from certain secondary bureaus for background checks, particularly for roles requiring financial management or security clearance.

Insurance companies use specialized data to underwrite policies and determine premiums. Bureaus focusing on claims history, such as A-PLUS Property, provide insights into an individual’s past insurance losses, which can affect policy approval or cost. Utility providers, including electric, gas, and water companies, rely on reports from telecom and utility-focused bureaus to decide on service eligibility or deposit requirements. Alternative lenders, who serve consumers with less conventional credit histories, depend on detailed insights from bureaus specializing in non-prime lending or payday loan data to evaluate risk for loans not captured by primary credit reports.

Managing Your Secondary Credit Reports

Consumers have rights regarding information held by secondary credit bureaus, including the ability to access their reports and dispute inaccuracies. The Fair Credit Reporting Act (FCRA) extends protections to reports from all consumer reporting agencies, not just the primary ones. If a secondary credit report is used to take an “adverse action” against you, such as denying an application for housing or insurance, the entity must inform you and provide the name of the agency that supplied the report.

Upon receiving an adverse action notice, you are entitled to a free copy of the report that was used. To obtain reports from secondary bureaus, you may need to directly contact each specific agency, as they are not all centralized like AnnualCreditReport.com for the major bureaus. Once you have your report, carefully review it for any errors or outdated information. If you identify an inaccuracy, you have the right to dispute it with the reporting agency.

The dispute process involves submitting a written request to the bureau, detailing the inaccurate information and providing supporting documentation. The bureau is then required to investigate the dispute within 30 days. If the information is found to be inaccurate or cannot be verified, it must be removed or corrected. It is advisable to send dispute letters by certified mail with a return receipt requested to maintain a record of your communication.