Why Are My Scores Different From The Credit Reporting Agencies?

Checking your credit score will give you an overall picture of your financial situation, but have you ever looked at your scores from all three credit reporting agencies?  If so, you have probably noticed that your scores will not match up.

What happens if your score differs from one credit bureau to the next?  Why does this happen, and is there anything you can do about it?

Why You Have Different Scores

credit reporting agencies

There are three credit bureaus in the United States: Equifax, TransUnion and Experian.

These three bureaus gather, update and store credit histories of U.S. consumers. The vast majority of the information they receive is the same, but there are instances when information may differ.

One bureau, for example, may have a piece of unique information about you that the other two bureaus do not have. In some cases, all three bureaus will have the same piece of information, but will display or store the information differently. This can cause your score to fluctuate between the two. Even if your exact score differs from one agency to the next, all three will probably be in the same ballpark range.

If there is a significant difference between your scores, the discrepancy is likely caused by differing underlying data. In other words, each bureau has different, unique data that is off-setting your score.

There are also some other factors to consider when comparing your scores.

  • All three score should be accessed at the same time. If you decide to check your score from one credit bureau this week and a different bureau in two months, your score may change significantly during this time. The first score you receive will likely be outdated by the time you receive your second score.
  • Keep in mind that all of the information the bureaus receive is supplied by creditors and lenders. It is not uncommon for one bureau to receive a unique piece of information that is never reported to the other bureaus. With each agency having differing information, it’s easy to see why your credit score can vary from one bureau to the next.
  • In some cases, lenders or creditors will report information at different times. This means some of the bureaus will receive information later than others.
  • There are some instances when consumers apply for credit cards under different names. They may use a nickname or their maiden name. This can cause discrepancies in the bureau’s files. Inaccurate or incomplete files are not uncommon and may cause information to appear on another person’s report as a result.

Each Credit Bureau Has its Own Scoring Model

Many consumers are surprised to learn that each credit bureau has its own scoring model. Not all scores are FICO scores either, which can cause further confusion. Scoring models may be based on the FICO score, but the information may be displayed differently.

For example, Equifax’s score may range from 350 to 850, while Experian’s credit score may range from 330 to 830. TransUnion’s score may range from 300 to 850. While they are all similar, you may wind up receiving three very different scores.

There are more than 50 different credit scoring models available to creditors and lenders. Each one is different and each one will produce a different score. The companies that create these models are competing for the business of lenders and creditors. They do not collaborate with one another when creating their scoring models. This is why your score may differ greatly from one bureau to the next.

How Different Scores Affect You

If you receive different scores from each credit bureau, you may be wondering how it will affect you. Generally speaking, you shouldn’t be too concerned over differing scores. With so many different scoring models available today, there really isn’t much you can do to prevent these differences. Furthermore, lenders and creditors are well aware that credit scores may differ and also understand that different scoring models are used with each bureau.

While your exact number may change, there is one thing that will remain the same: The direction of your score. If you have a great credit report, then your score will reflect that. It doesn’t matter what scoring model is used; if your credit is good, you have nothing to worry about.

The same can be said about poor credit reports. A person with a poor credit history will have a poor score regardless of which scoring model is used. In other words, you probably won’t have a credit report with a stellar 720 FICO score and a not-so-great 550 VantageScore.

Middle Scores and Minimum Credit Scores

When it comes to mortgages, lenders will access reports from all three credit bureaus when you apply. Because they will receive three different scores, they use what’s known as the “mid-score.” Let’s say your scores were 725, 743 and 735. The mortgage company would simply use 735 as your score. They don’t calculate the average score; they simply choose the middle score.

Minimum scores may also impact your ability to take out a mortgage. Lenders are allowed to set their own minimum score requirements, so checking all three scores is of the utmost importance.

Focus On Your Credit History

Every consumer is entitled to a free credit report each year from AnnualCreditReport.com. Take advantage of this opportunity and see what your credit history looks like. Regardless of what scoring model is used, they are all based on your credit report.

Improving your credit history can help improve your scores and, hopefully, minimize the difference between each one. When checking your report, take a careful look at the information and check for errors. Errors may be causing a negative impact on your score and may be an indication of identity theft. If you find unfamiliar accounts or find that your familiar accounts are suddenly overdue without your knowledge, it is important to report this to the agency as soon as possible.

Having different credit scores is typically normal. Just keep a careful eye on your credit report for inaccuracies, which may be a cause for concern.