A credit bureau is a library of information for credit history. It collects data about consumer's payment habits from credit grantors such as banks, savings and loans, credit unions, finance companies, and retailers.

The credit bureau stores this information in a computer database in the form of a credit report. When you apply for a new credit card or loan, the credit grantor orders your credit report from a credit bureau and analyzes the information to decide whether to grant you credit. Most experts recommend that you get your credit report on your own ahead of time in order to better prepared. There are over 1,000 local and regional credit bureaus throughout the United States. Most credit bureaus are either owned or under contract with one of the nation's three major credit reporting agencies. These national agencies maintain centralized databases containing the credit records of more than 190 million Americans.

Which are the major Credit Bureaus?
There are three major credit bureaus that provide nationwide coverage of consumer credit information in the U.S. -- Experian, Equifax, and Trans Union.

• Experian, an Orange, California-based, privately held company, markets credit related products and services, including consumer and business credit reports, and real estate information.
• Equifax, headquartered in Atlanta, GA, is a public corporation that serves numerous markets in the information services industry. It provides credit related products, check approval systems, and insurance information.
• Trans Union is a privately held corporation headquartered in Chicago whose sole business is credit related products. Trans Union is comprised of many small, local bureaus who do not necessarily conduct business under the Trans Union name, but are owned by Trans Union.

Credit bureaus do not approve or reject consumer applications for credit, nor do they "rate" your credit. They merely report the information provided by the credit grantors.