Three agencies virtually monopolize the credit reporting industry:
lRW, Trans Union, and CBl/Equifax. Equifax's reach is not limited to the United States; it is also a primary credit information supplier in Canada. These three agencies probably account for more than 90 percent of the credit information market in the United States. The near monopoly they have on the credit reporting industry makes these companies extreme1y profitable. lRW Credit Data Services, a division of TRW, Inc. took in over $690 million in revenue in 1988 alone. The bulk of their profits did not come from consumers, who purchase their own credit reports, but rather "subscribers," or creditors who use their services and provide most of the credit data. Subscribers fulfill a duel role as both providers of information and users of credit information. For example, a large retail department store might report the status of each of its credit card accounts to lRW. When opening a new charge account, it might also obtain a credit report from TRW to insure that the applicant is creditworthy. Credit bureaus only report accounts that belong to subscribers.
Subscribers may include banks, department stores, and finance companies, who probably both supply account information and use credit reports in opening new credit accounts.
One important thing to remember when dealing with any of these credit bureaus is that, contrary to popular belief, they do not share information with each other. If you think about it that would be like Apple Computer telling IBM how they make their screen so clear. These are competitive companies, often fiercely so. They earn their profits by convincing consumer credit users, or "subscribers" that they can supply the best credit report in the industry. Often this doesn't mean the most accurate but rather the one containing the most dirt. As we mentioned in the previous chapter, subscribers such as banks, department stores and other lenders use credit reports to find negative information, not to look at the accounts you've paid as agreed. Each credit bureau's file on you is probably very different There is also a good chance that one file will contain the most information on you. This file is usually with the most dominant credit bureau in your region. In the west, TRW dominates; in the South, East and Canada, Equifax; and in the Midwest, Trans Union.
When the credit reporting industry was young, these companies all dominated as large regional firms and many of their customers have naturally remained loyal. Most local credit bureaus listed in the Yellow Pages will be affiliated with one or more of these national firms. Knowing which credit bureau is used by a potential lender can often help you choose where to apply.
