If you have gotten hold of all three of your credit reports and scores, you may question why the information varies. Especially with the different scores that you have gotten since they should more or less be the same after all you only have one financial track record. So, why aren’t they the same? There is an estimated disparity of around 40 points across all three scores from the three credit reporting bureaus for every consumer. It isn’t a surprise then when you get a good score with one bureau and a poor score in the other. But why?
The simple answer would be that the bureaus; TransUnion, Equifax and Experian hold different information about an individual and compute the scores using different methods and algorithms. A big part of the credit report is the same across all three credit reporting agencies but a few bits of detail may be available to one and not available to the others. For example, you will obviously find personal information in all three reports. Personal information includes name, address, Social Security number and so on.
Credit history that all three bureaus take into account when computing for the credit scores are payment history, debt to credit ratio, types and kinds of credits, new credits and duration in the bureau. Where the scores will start to deviate is in the rating that the credit reporting agencies give the aspects of an individual’s credit history. For example, not the other two agencies put much importance in employment history like TransUnion and only Equifax has an 81-month credit history for the consumer’s credit accounts.
The credit scores from each of the bureaus are summed up differently. Equifax has its own credit score that determines the credit risk there is on an individual that a lender will be taking. TransRisk is what TransUnion call their scoring method and Experian uses their own PLUS score. These scoring systems usually range between 250 to 850, 850 being the highest and means the least risk.
Another reason why there are differences in the credit scores from the three bureaus is the information that is available to each of them. It is possible for a creditor for example to update a consumer’s credit report in one bureau but fail to update it in the other two agencies. Or there may be a discrepancy in a consumer’s credit report in one of the credit reporting agency’s records thus causing the significant increase or decline in the credit score.
You, as a consumer could also be affecting the difference in the credit reports and scores. You may have unknowingly supplied inaccurate information or you have failed to check your records for any anomalies. That is why every consumer should acquire their free credit report every year to make sure that everything in it is true and settle any incorrect information.