If you have ever purchased a three-in-one credit report or redeemed your free credit scores from multiple sites in one day, you may have noticed that your credit scores differ for the three credit bureaus. Having different credit scores is normal; here are the reasons that lead to this.
Scoring Models
There are many credit scoring models, and each model can give you different credit scores. For example, each of the three credit bureaus uses its own model to calculate your credit scores; in addition, the bureaus have collaborated to develop the VantageScore model. FICO, one of the most well-known credit scoring companies, has its own credit scoring model as well. Banks and other screening services may also have different credit scoring models.
Report Data
The credit bureaus collect data independently of each other and typically do not share it. Not only that, but your creditors and lenders may report data to just one or two of the credit bureaus. Therefore, your credit report from Equifax, Experian, and TransUnion may look different from one another depending on the information found in each credit report.
Which One Does the Lender Use?
Typically, lenders have established relationships with one or more credit bureaus. You can ask your lender which credit bureau they purchase credit scores from (they may tell you or they may not), but you generally cannot request that the lender use a specific credit bureau to obtain your score.
Most lenders use FICO scores developed by FICO, formerly known as Fair Isaac Corporation. You can purchase your FICO scores based on credit reports from Equifax, Experian, and TransUnion from myFICO.com.
Scores You May Not Know About
In addition to the credit scores you can purchase, companies have access to some specialized industry credit scores that you cannot buy directly. For example, there are auto insurance scoring models, bankruptcy prediction scores, and mortgage credit scores. These scores will not match anything you purchase online because they are tailored for that industry. General credit scores obtained online are for informational purposes only.
Is Checking Your Credit Scores Worth It?
Although the credit scores you check may not match the scores your lender obtains, it is still important to check your credit scores. You can get a free credit report once a year or use a credit monitoring service to get your scores.
Note: You can get one free credit report each week from Equifax, TransUnion, and Experian until December 2023 at AnnualCreditReport.com.
Credit scores will give you a general idea of your credit standing, whether you have good or bad credit scores. You will get a good indication of whether you need to improve your credit or if your chances of getting approved for a credit card or loan are in your favor. If possible, review at least one credit score from each of your three credit reports to get an idea of your overall credit picture.
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Sources:
– VantageScore. “About VantageScore.”
– myFICO. “What Is a FICO Score?”
– Consumer Financial Protection Bureau. “What Is a Credit Score?”
– AnnualCreditReport.com. “Home Page.”
Source: https://www.thebalancemoney.com/why-you-have-different-credit-scores-960498
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