Also known as credit bureaus, credit reporting agencies maintain a record of your credit/financial information to help future lenders and employers rate your reliability. The most notable three credit reporting agencies are, TransUnion, Equifax, and Experian. Your credit score varies based upon many factors including the agency your using, your financial history, credit history, available credit and the amount of accounts you may have. These agencies don't report information to one another and lenders tend to report information to all three individually, or to the several other smaller credit reporting agencies. Credit reporting agencies tend to use the credit scoring model FICO or VantageScore. TransUnion uses VantageScore while Equifax and Experian use FICO. Although these scoring models are similar you may still get three different credit scores just based off of your financial information.

In order to get a loan, you need to demonstrate habits that make you a trustworthy investment. If lenders were left to their own devices, they would likely at some point be tempted to employ personal bias in the evaluation of an investment risk which in some cases could lead to discrimination or exploitation. This premise is the general idea behind the creation of Reporting Agencies and their purpose in finance. They aim to act as a neutral middleman with no bias that objectively collects information and creates an assessment based on the consumer's finances. The system isn't perfect but it does allow for personal judgement to be removed from the evaluation.