Why Are Scores Different With The Three Credit Agencies?
November 6, 2010 by Celebration
Filed under Web News
You have probably heard that it is good practice to check your credit regularly to make sure there are no mistakes reported on it. If you have previously received copies of your credit report from the three agencies, you have probably noticed the scores are different.
What is the reason for the differences? Here are a few reasons. First of all, check each report thoroughly to make sure all of the information is correct.
You might find some items that aren’t correct, and your credit score with that particular agency is therefore compromised. If you find a wrong item on one report, then that report would be different than the other two. You should fix any incorrect items to make sure you have the right score.
Also, each agency follows a different formula to come up with the scores, so that’s one of the reason they are a little different. Experian used the FICO score, plus a few more items.
Equifax uses the standard FICO scoring model and TransUnion uses their own scoring system that they’ve developed for themselves. It is always possible that your credit card companies are not simultaneously reporting to all three agencies.
If they report to only one agency, the report from that agency would be different than the other two. Make sure information is correctly entered on all three reports.
It’s also possible that some of the information that’s reported to the credit bureaus isn’t given to all three at the same time. One credit reporting agency may have received the information from a company, but the other two reports may not have gotten the information just yet. The credit scores would then differ greatly until the other two agencies receive the same information.
It is up to you to ensure your information is correct and consistent on all three reports, so that you won’t have any nasty surprises when you go apply for a loan.
It’s important to note that all three reports are not likely to have the same score as each other – even if all three have the same information. Since the different monitoring agencies use different factors and figures to come up with the score on your credit habits, it wouldn’t be feasible to waste your time trying to get the scores to come out exactly the same.
All that should matter to you is that you keep up with your payments, and that your reports don’t have any errors. If you’ve kept your credit positive, then the scores will reflect that and lenders who evaluate the reports will agree that you’ll be a good risk to lend the money to.
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