The Fourth Credit Bureau You Don’t Know About

Credit bureau firms that fly below the radar: Internet Scambusters #475

It sounds like some kind of intelligence agency but the “fourth bureau” is actually a collection of organizations that do credit bureau type checks on financial records.

Unlike the well-known Big Three bureaus, these firms are what Consumer Reports magazine calls “under the radar companies” that collect and supply all kinds of personal information on which other firms make decisions about your financial worthiness.

They’re a motley collection of businesses that are difficult to identify and communicate with, yet their operations could impact your financial life, as we explain in this week’s issue.

The Fourth Credit Bureau You Don’t Know About

Keeping track of your credit report via the three big credit bureau companies — Equifax, Experian and Transunion — is a key part of safely managing your finances.

Firms use these records, in particular your consumer credit score, to decide if you’re a safe bet to lend money or extend credit to.

We’ve explained before how you can access your consumer credit score for free at each of these firms and what to do if you discover that your identity has been stolen and someone is using your name to get credit.

Can You Really Get a Free Credit Report — Without Getting Scammed?

The 7 Things You Must Do If You Believe You Are A Victim Of Identity Theft

Of course, as we also reported, a number of firms use the “free credit report” tag to spam you, or as a means of getting you to sign up for a service that actually costs you money.

So it’s worth repeating that the only authorized federal source for your free annual credit report is

You can learn more about this and the general subject of credit reports from the Federal Trade Commission (FTC).

However, what a lot of people don’t know is that there are also what Consumer Reports magazine refers to as “under the radar companies (that) use unreliable information to create consumers’ credit scores.”

The Fourth Bureau

Last year, Consumer Reports called for government action against these other firms, which the magazine collectively labeled “the fourth bureau.”

While the Big Three credit bureau firms track activities like credit card payments, store credit accounts and such like, holding more than 200 million records, these fourth bureau outfits look at other details of people’s personal financial activities.

These might include, says Consumer Reports, your membership of a gym, magazines that you subscribe to “and other files considered unreliable for determining creditworthiness.”

Add to these, according to a report in the Washington Post, records like utility and cellphone bills and even home rental payments, medical insurance and insurance claims history.

There’s no credit industry standard for this type of data, says the Post, but credit providers still resort to the fourth bureau for information, not least because they likely cover the 30 million Americans that the Federal Deposit Insurance Corporation imagines don’t show up in the Big Three’s records. Some say that figure could be as high as 70 million.

Consumer Reports warns: “Consumers often aren’t aware those files exist, nor do they know how to get the errors corrected.

“Existing standards for handling credit information don’t cover all the activities of the fourth bureau and enforcement is spotty.”

The solution, it suggests, is for Congress and regulators to make these other firms more accountable for the way they operate: “All data brokers should allow consumers to see their records, fix problems, and know when information is being used to make decisions about them.”

The situation is not all bad. People who don’t have records with the Big Three can find it difficult to get credit at all, but if they show up in the fourth bureau, and their track record is good, they may get lucky and qualify for credit.

But that’s still a big “if.” If you’ve been late on, say, paying your gym membership renewal, you could run into problems, even if your record is clean with the Big Three.

“For consumers outside the Big Three, the data in the fourth bureau can help them establish a track record that proves they are financially responsible,” says the Washington Post. “Showing that you’ve paid other bills on time may help persuade banks to lend you money. But not all of them are willing to accept the data in place of a traditional credit history.”

No Free Records

Furthermore, you’re not entitled to a free copy of your record unless you get turned down for credit or charged a high interest rate. Otherwise, you have to pay.

Just to make matters worse, there’s no single record of the names of these other firms. They don’t fit neatly under the single “credit bureau” umbrella. Some of them just track particular types of data and, of these, some offer it directly to firms making credit inquiries while others sell it on.

Another Washington Post article did list some of them. And although you have to pay a subscription to read this article on the newspaper’s site, it is available in full elsewhere for free.

In a letter to several Congress committees, Consumer Union regulatory counsel Iona Rusu wrote: “Most American consumers have no way of knowing that this information is being collected about them and used in ways that could affect their interest rates, housing, and employment. Even when individuals find out about the ‘fourth bureau’s’ existence, accessing and correcting data about them is nearly impossible.”

Obviously, what we’re talking about here is not a scam, but a process that can adversely and unfairly affect consumers, over which they have little power to take action.

The one thing you can do though is ask a company from whom you hope to get credit how they vet your records. If you get turned down, ask them the reason and the name of the credit bureau or other organization that gave them the information so you can attempt to set things straight.

You may want to spend a moment looking at this week’s most popular articles from our other sites:

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That’s it for today — we hope you enjoy your week!