TransUnion

What is TransUnion?

TransUnion is a US-based consumer credit reporting agency that has been in business for decades and operates in around 30 countries.

Techopedia Explains the TransUnion Meaning

An image describing the meaning of TransUnion

The most accurate TransUnion definition is that it’s a global information and insights company with decades of experience in analyzing data.

It’s one of the three main credit reporting agencies (also known as credit reporting agencies) alongside Equifax and Experian. They all collect information related to people’s credit histories.

Their work is used by banks, building societies, and insurers, as well as organizations such as courts, that make decisions based on financial information.

History of TransUnion

The history of TransUnion can be traced back to 1968, when it was created by The Union Tank Car Company as its parent holding company. The following year it acquired the Credit Bureau of Cook County, which manually maintained 3.6 million card files.

It spent the next three decades improving its processes through technological developments, strategic growth, and acquisitions.

TransUnion Goes Public

In 2002, TransUnion entered the direct-to-consumer market with the acquisition of TrueCredit.com, which helps global consumers protect and improve their credit.

In 2015, the company went public on the New York Stock Exchange (NYSE) via an initial public offering (IPO) and began trading under the ticker symbol: ‘TRU’.

The company has continued to expand and, in 2018, acquired CallCredit, the second largest consumer credit reporting agency in the UK.

How TransUnion Works

TransUnion collects information from various sources, including financial institutions, authorities, and utility companies. It then provides “consumer reports, risk scores, analytical services, and decisioning capabilities to businesses.”

The company believes itself to be the largest provider of risk and information services in the US and has a global presence in more than 30 countries, according to an SEC filing.

“We are differentiated by our comprehensive and unique datasets, our next-generation technology, and our analytics and decisioning capabilities, which enable us to deliver insights across the entire consumer lifecycle,” it stated.

The company recently announced that its total revenue for the first quarter of 2024 was $1bn, up nine percent on the corresponding period in 2023.

“We believe we have an attractive business model that has recurring and diversified revenue streams, low capital requirements, significant operating leverage, and strong and stable cash flows,” it noted in the most recent annual report.

TransUnion Core Services

TransUnion offers a variety of free and premium services to individuals and businesses, including consumer reports, risk scores, and analytical services. According to the company’s SEC filing, businesses embed their solutions into workflows to help acquire new customers and assess their ability to pay for services.

They can also help measure and manage debt portfolio risk, collect debt, verify consumer identities, and investigate potential fraud.

“Consumers use our solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft,” it added.

What Information Does TransUnion Collect?

Credit reporting agencies, such as TransUnion, will collect and store personal information about the financial history of individuals. The company has stated that its insights make trust possible between businesses and consumers.

“That trust is built on TransUnion’s ability to deliver safe, innovative solutions with credibility and consistency,” it stated in its 2023 annual report. “We call this Information for Good.”

The key information it holds includes:

Your presence on the electoral register
Any court judgments made against you
Bankruptcies or insolvencies
Past and current borrowing agreements
Information on outstanding debts and your repayment history

Credit Score Factors

TransUnion will come to a conclusion on your rating based on how you’ve previously managed lines of credit. Different credit reporting agencies have their own scoring models, which means they may place more emphasis on certain areas.

For example, the most important factor considered by TransUnion is payment history, followed by someone’s age and credit mix.

What is a Good TransUnion Credit Score?

The TransUnion score is out of 710. Therefore, a good rating would be classified as anything above 600, whereas closer to the maximum would be viewed as excellent.

Rival credit reporting agencies have their own systems. For example, Equifax has a maximum score of 700, while Experian’s is 999.

However, there’s more to it than just a simple reading of a three-digit sum. Just because you have a high rating doesn’t automatically mean you will be accepted for credit and vice versa.

Different financial product providers will have their own criteria, and your credit score is likely to be just one factor that’s taken into account.

The information supplied in your application, your existing credit accounts, and the firm’s own rules will also be considered.

What’s on a TransUnion Credit Report?

A TransUnion is a record of your personal credit history that has been sourced from banks, building societies, local authorities, and the courts.

Many people have a credit history without even knowing it. In fact, if you’re an adult with a bank account and have borrowed money, then the chances are you’ll have a record.

The credit report is divided into different sections.

Personal Information

This includes your name, addresses, phone numbers, social security number, and employment data. While this information is not factored into your credit score, it’s still important that it is accurate.

Public Records

Bankruptcies will appear in this section. They stay on your credit history for different periods, depending on the individual situation. They can severely affect your score.

Account Information

This details the name and contact information of any companies that have issued you with credit. It can also include balances, payments, dates, and remarks.

Accounts with Adverse Data

Missed or late payments will be highlighted here. “Missed payments are a major credit score factor,” according to TransUnion. “Adverse information will typically remain on your credit report for up to seven years.”

Satisfactory accounts

This is a positive section. It contains current and closed accounts that were viewed as being in good order. Student loans and some utility accounts may also be detailed. Seeing lots of green or “OK” is a great sign and shows healthy habits of paying accounts on time.

Collections

Seriously past due accounts will be listed in this section. This can include creditors trying to collect the overdue amounts themselves as well as those sold to a debt collection agency. Having an account in arrears can significantly impact your credit score.

Regular Inquiries

Information on companies requesting your report will be listed, as well as their contact information and the date on which the information was provided. These ‘hard’ inquiries can negatively impact your credit score, so they should be kept to a minimum.

Promotional Inquiries

These are known as ‘soft’ inquiries, and they occur when companies receive limited information to make an offer of credit. They won’t have received the full credit report.

Account Review Inquiries

When a lender, insurer, or other authorized company accesses your credit report, it will be detailed in this section. This can include landlords screening you as a potential tenant.

Consumer Statement

You can add a note of up to 100 words to our credit report to describe your financial situation to readers of the report.

What are TransUnion Credit Reports Used For?

When people talk about TransUnion’s meaning, they usually refer to its role in assessing risk worthiness. The company’s reports help organizations better understand consumers and make more informed decisions.

They will contain information on someone’s past credit history and whether they have successfully paid back previous amounts borrowed.

TransUnion vs. Equifax and Experian

These are three of the main credit reporting agencies. They will operate in broadly the same ways, although each will have its own scoring criteria.

For example, the maximum TransUnion score is 710, whereas Equifax can be up to 700 and Experian’s is 999. The subsequent score given will be based on the interpretation of the data and information used by the individual agency.

Beyond Credit Reporting

TransUnion doesn’t just detail the credit history of individuals. It also uses the information it’s established to compile detailed reports.

These insights are delivered through blogs, videos, webinars, infographics, podcasts, eBooks, and Whitepapers.

For example, its 2024 State of Omnichannel Fraud report examines the trends and strategies that can be employed for smarter, more effective fraud prevention strategies.

TransUnion Credit Scores Pros and Cons

There are clear pros and cons when it comes to credit scores.

Pros

Helps businesses assess the creditworthiness of potential customers
Highlights problems with your past credit history
Enables firms to avoid bad risks

Cons

Errors can adversely affect your rating
Not all lenders share information with every CRA
Information is heavily based on someone’s previous history

The Future of TransUnion

So, what does the future hold for TransUnion? At the end of 2023, the company updated investors about its multi-year transformation plan. This includes optimizing its operating model and advancing its market-leading technology to help improve productivity, reduce costs, and fund growth.

The company expects to deliver $120 to $140 million of annualized operating expense savings and a $70 to $80 million capital expenditure reduction in 2026, relative to 2023 levels.

In a statement, Chris Cartwright, President and CEO of TransUnion, said: “I’m excited about TransUnion’s direction and believe that these changes enhance our ability to deliver even more innovative solutions that help customers grow and protect their businesses.”

The Bottom Line

Businesses across the world rely on credit reporting agencies to help them decide whether an individual will make a good customer. Knowing how successfully they have been able to meet repayments in the past can help indicate their creditworthiness.

However, the reports compiled by agencies are not infallible. Mistakes can be made along the way that may unfairly represent a person’s history.

That’s why it’s important to monitor your credit score and read your up-to-date report so that you can correct any errors.