Experian is an Irish-American multinational and one of the major credit reporting agencies. The company is based in Dublin, Ireland. It operates across 37 countries and has offices in Brazil, the United Kingdom, and the United States. It employs about 17,000 employees and reported estimated revenue of US$5.18 billion in the fiscal year ending in March 2022.
The company, like other major credit reporting agencies, is chiefly regulated by the Fair Credit Reporting Act (FCRA). The Fair and Accurate Credit Transactions Act of 2003 was signed into law in the change to amend the FCRA to require credit reporting agencies to give consumers one free copy of their credit report per 12-month period.
You can get that free credit report by going to https://www.annualcreditreport.com/index.action.But be aware that the credit reports you get from this service WILL NOT have your credit score on them. You will have to purchase a credit report in order to get that.
Experian is also a partner in the U.K government’s Verify I.D system and USPS address validation.
What does Experian do?
Experian gathers and consolidates information on over about 1 billion individuals and businesses and creates credit reports by analyzing and collecting credit histories, which are a way of sorting through data about the credit that an individual applied for, whether or not the applications and the method they used to pay were successful.
Experian provides these pieces of information to companies and businesses so that they can make a credit decision, based on your credit score. The score is a prediction of how likely individuals and businesses are to repay what they owe. The company’s consumer services also provide online access to products that are designed to safeguard against fraud and identity theft.
In addition to their credit services, Experian also sells to businesses decision analytics and marketing assistance, including fingerprinting and targeting.
How Experian calculates your Credit Score
Here are 5 factors that play an important role in how Experian calculates your credit score:
- Your repayment history. Your repayment history influences your credit score the most.
- Credit Utilisation Ratio (CUR)
- The number of credit accounts.
- Age/duration of credit lines.
- Number of credit inquiries made about you
The calculations used in credit scoring systems for commercial use, such as FICO Score and VantageScore, are extremely complicated.
Credit scoring algorithms or scoring models assess your credit reports at Experian or at the other major credit reporting agencies. These algorithms use extensive statistical analysis to discover patterns that can be attributed to loan defaults.
Experian calculates your credit score by utilizing the information on your credit reports, which are constantly updated with information about your credit activities, such as your credit card usage, payments of loans, and credit card accounts, as well as new applications for loans and credit.
Credit scores that are taken a few days apart, and perhaps even hours apart, could be different due to the latest information such as missed loan payments.
Since creditors and or lenders do not necessarily have to be consistent in submitting their information to all credit bureaus like Experian, the credit reports you receive aren’t always the same. However, even if they utilized the same credit report information on various credit scoring models it will likely give different scores since each model employs its proprietary calculation methods.
The companies that create credit scoring models modify each year to keep up with the changes in consumer behavior. The precise calculation techniques of these formulas for credit scores are protected as trade secrets. However, scoring firms are open to sharing information about the factors that affect your credit score.