4 Things You Should Know About the Credit Reporting Agencies

There are three major companies that collect business information and publish it. These are Dun & Bradstreet, Experian, and Business Equifax. D&B is by far the largest, but the other two are catching up quickly.

The #4 thing you should know about the business credit reporting agencies is Equifax’s age and history. Equifax is the oldest and largest consumer credit bureau in existence today. They were originally founded in 1898, 70 years before the creation of TransUnion.

Two brothers, Cator and Guy Woolford, created the company. Cator actually got the idea from his grocery business, where he collected customers’ names and evidence of credit worthiness. He then sold that list to other merchants to offset his own business costs.

The #3 thing you should know about the Business Credit reporting agencies is that consumer credit reporting actually got its start in the grocery business. The success of selling his list to other grocers led Cator and his attorney brother, Guy, to Atlanta, where they set up what would become one of the most powerful industries in existence today. The Retail Credit Company was born, and local grocers quickly started using the Woolford service, which expanded rapidly. By the early 1900s, the service had expanded from grocers to the insurance industry.

The #2 thing you should know about the business credit reporting agencies is to know the data that the bureaus used to collect. Equifax also provided companies with services including investigating insurance claims and making employment reports when people were seeking new jobs. Back in the 60s, most of Equifax’s credit work was actually being done by their subsidiary, Retailers Commercial Agency.

In the late 60s, Equifax started to compile their data onto computers, giving many more companies access to this data – if they chose to purchase it. They also continued to buy up many more of their smaller competitors, becoming larger and also attracting the attention of the Federal government. They began to earn a bad reputation for selling data to anyone who wanted it, whether or not the data was accurate.

Equifax was gathering details about people including their marital troubles, jobs, school history, childhood, sex life, political activates, and more. There was no limit to the kind or amount of data they were collecting.

Some of the information was factual, while large swathes of the rest were completely false; some information was literally no more than rumors. Equifax was even said to reward their employees for finding the most negative information about consumers.

The #1 thing you should know about the business credit reporting agencies is that Equifax’s unethical practices led to the creation of the Fair Credit Reporting Act. In response to Equifax’s actions and unethical data collection procedures, when the US Congress met in 1971 it enacted the Fair Credit Reporting Act. 

This new law was the first to govern the information credit bureaus and regulate what they were allowed to collect and sell. Equifax was no longer allowed to misrepresent itself when conducting consumer investigations and employees were no longer given bonuses on the basis of the negative information they were collecting, the standard practice in the past.