Experian, Equifax, and TransUnion are examples of what?

• A. Banks
• B. The major credit reporting agencies
• C. Insurance rating agencies
• D. Stock exchanges

Answer: (B)

These are credit reporting agencies. They collect and maintain records of individuals’ and businesses’ credit activities from lenders and other data furnishers, then compile credit reports and provide this information to lenders to assess creditworthiness. They also supply the data that scoring models use to generate credit scores, like FICO, which lenders rely on when deciding approvals and terms. They are not banks, insurance rating agencies, or stock exchanges; their role is to document and report credit history, not to issue loans, rate insurance, or trade securities. They’re commonly called the major credit reporting agencies, often referred to as the Big Three.