Published By Credit Suite at January 29, 2016
Many people don’t know that Equifax is the oldest consumer credit reporting agency in the country. They were founded back in 1898, a shocking 70 years before the creation of Trans Union.
Two brothers, Cator and Guy Woolford, created the company. Cator actually got the idea from his grocery business, where he collected customers’ names and evidence of credit worthiness. He then sold that list to other merchants to offset his own business costs
The success of this tactic led Cator and his attorney brother, Guy, to Atlanta, where they set up what would become one of the most powerful industries in existence today.
The Retail Credit Company was born, and local grocers quickly started using the Woolford service, which expanded rapidly. By the early 1900s the service had expanded from grocers to the insurance industry.
Retail Credit Company continued to grow into one of the largest credit bureaus, by the 1960s having nearly 300 branches in operation. They collected all kinds of consumer data, even rumors about people’s marital lives and childhoods. They were also scrutinized for selling this data to just about anyone who would buy it.
In the late 60s, Equifax started to compile their data onto computers, giving many more companies access to this data – if they chose to purchase it. They also continued to buy up many more of their smaller competitors, becoming larger and also attracting the attention of the Federal government.
They began to earn a bad reputation for selling data to anyone who wanted it, whether or not the data was accurate. Equifax was gathering details about people including their marital troubles, jobs, school history childhood, sex life, political activates, and more. There was no limit to the kind or amount of data they were collecting.
Some of the information was factual, while large swathes of the rest were completely false; some information was literally no more than rumors. Equifax was even said to reward their employees for finding the most negative information about consumers.
In response, when the US Congress met in 1971 it enacted the Fair Credit Reporting Act. This new law was the first to govern the information credit bureaus and regulate what they were allowed to collect and sell.
Equifax was no longer allowed to misrepresent itself when conducting consumer investigations and employees were no longer given bonuses on the basis of the negative information they were collecting, the standard practice in the past.
Equifax has a very interesting past. Most notably, they were the first bureau to gather credit data. And, their tactics for gathering data in large part led to the actual creation of the Fair Credit Reporting Act itself.
Check out the video below to learn even more about Equifax.