What is a Sub-Bureau?
Many people get confused when they go online to the three major Credit Reporting Agencies and get their free annual credit reports. (If you want your score that is an additional fee) The Federal Trade Commission mandated that the Big Three–Experian, Equifax and TransUnion obtain a central physical address, toll free telephone number and website so that consumers didn’t have to contact each bureau individually. The best way to find this information is go to the “official website: www.annualcreditreport.com.
Keep in mind that before the FACT Act of 2005, which implemented this change, people were completely confused about where to go and how to contact the three major bureaus.
The Big Three originally didn’t sell their reports to the general public but once this law was enacted they saw there was a new revenue stream they could tap into! That’s why you will see them advertise on TV, Internet and other venues now days.
But prior to this law, they gathered all of our credit related information and sold to third parties which we in this business call “Sub-bureaus”.
Sub-bureaus are third party businesses that would then buy the information from the big three, repackage it, meaning put it into a different format and use their own scoring system to sell to different industries. Credit card companies, banks, employers, prospective landlords, the auto industry, most any company that offered credit to consumers.
Here’s the problem–when you go to purchase a home, car, boat or anything you finance, the scoring system the Sub-bureaus use is the only one that matters!
You may have paid extra for the credit score on your free annual reports and be very happy with it. Then go into your bank for example and find your credit score is much lower than what the Big Three told you.
This practice is unfair and the Federal Trade Commission tells us in recent news articles that they are trying to have your three scores much more “in-line” with Experian, Equifax & TransUnion.
Unfortunately—once again this Government Agency is slow to act and at this time there is not much a consumer can do except write a letter or email the FTC.