Credit Infocenter

First Credit Bureau Equifax – Why the Fair Credit Reporting Act Exists (Part 3 of 3)

July 17th, 2008 · 5 Comments · Credit Bureaus and Scores, Credit Reports

by Kristy Welsh

(Last Updated On: July 19, 2008)

Equifax was founded as Retail Credit Company in 1899. The company grew quickly and by 1920 had offices throughout the US and Canada. By the 1960s, Retail Credit Company was one of the nation’s largest credit bureaus, holding files on millions of American citizens. Unlike the two other bureaus, the company was formed to be exactly what it is today, a database on the personal credit histories of US consumers.

Retail Credit Company’s extensive information holdings, and its willingness to sell them to anyone, attracted criticism of the company in the 1960s and 1970s. These included that it collected “…facts, statistics, inaccuracies and rumors… about virtually every phase of a person’s life; his marital troubles, jobs, school history, childhood, sex life, and political activities.” The company was also alleged to reward its employees for collecting negative information on consumers. Because of the lack of legal oversight at the time, consumers had no right to see the information collected on them. Many didn’t even know the files existed.

As a result, when the company moved to computerize its records, which would lead to much wider availability of the personal information it held, the US Congress held hearings in 1971. From Wired Magazine:

One of the most vocal critics of Equifax was Columbia University Professor Alan Westin, who attacked the company for its cavalier attitude toward the accuracy of its information on consumers, and for giving out that information to practically anyone who asked for it. An article he wrote criticizing Retail Credit appeared in March 1970:

“Retail Credit files may include ‘facts, statistics, inaccuracies and rumors’ … about virtually every phase of a person’s life; his marital troubles, jobs, school history, childhood, sex life, and political activities.”….“Almost inevitably, transferring information from a manual file to a computer triggers a threat to civil liberties, to privacy, to a man’s very humanity because access is so simple,” argued Westin in the Times. The effect, he continued, is that it becomes harder and harder for people to escape from the mistakes of their past, or to move in search of a second chance.

Those hearings resulted in the passage of the Fair Credit Reporting Act in October 1971, which gave consumers rights regarding information stored about them in corporate databanks. Whether or not Equifax, as the company was known after the hearings were over and the passage of the FCRA, actually contained information about a person’s private life such as a person’s sex life seems to be born out by the documentary “the Secret History of the Credit Card“:

Chris Hoofnagle of the Electronic Privacy Information Center, a public interest research center says, CRAs back then reported only negative financial information as well as “lifestyle” information culled from newspapers and other sources — information such as sexual orientation, drinking habits, and cleanliness.

From Equifax’s website, some of the consumer information solutions it offers:

  • The Lifestyle Selector®
  • TotalSource XL ™
  • Equifax Credit Data
  • Equifax Prescreen Solutions
  • Connexus®
  • They also provide employment screening services through their purchase of the Work Number in 2008,

This is part 3 of 3 in our History of the Credit Bureaus Series. Read Part 1, the History of Experian and Part 2 of 3 the History of TransUnion here.

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5 Comments so far ↓

  • Ron Lawrence

    I worked with Retail Credit Company in Canada from 1948 to 1952 as credit and insurance report inspector. However, now that they are an agency to investigate credit, I have found that they have botched my report with a wrong address that they sent my report to, and to this day it is still on their records. I have not found a direct way to approach them about this and have this corrected. I have attempted to advise them without success.

  • Yenley

    I have had a false claim on my report for over 3 years now. I have contacted the company and wrote letters to everyone and have had no luck at fixing this. I think it really stinks that we can’t do anything about it.

  • Bella

    I was recently informed by a company that they were lowering my credit limit by nearly 3,000 due to a report from Equifax. I ordered my own report and it was nothing like what they had given my credit card. When I questioned I was informed BY EQUIFAX that the information they give me is always different from what they give creditors but for a substantial price they would provide me with the exact information credit companies can get electronically.

  • Phil

    I signed up for Equifax last year and have been trying to get them to stop billing me for 6 months. They put me on hold for hours and continue to come up with reasons to delay – they are horrible. Equifax is the herpies of the rating agencies – you’ll never get rid of them. Stay away!!

  • Dan

    I worked as an insurance inspector for Retail Credit Company in Brooklyn, from 1965 to 1968. Despite the allegations on Wikepedia, never once was I rewarded for filing a negative report. After I was promoted to Supervisor, one of my responsibilities was to randomly re-investigate cases of my staff. We didn’t tolerate sloppy work, and fired one inspector for falsifying information. However, it’s frightening to know the amount of information that such companies as RCC and Equifax can accumulate. In the pre-computer-database ’60s, we had massive file cabinets, filled with all sorts of information on individuals. Scary!

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