Why credit scores differ

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Why credit scores differ
2 years ago
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When you're going through the process of getting credit scores, you will probably notice something odd - they have several different credit scores!

One common question asked by people who have just received their credit report is: why do credit scores differ between the three credit bureaus (Equifax, TransUnion, and Experian)?

Credit Bureau Calculations
The answer is fairly simple: the credit bureaus all use different calculations to assign a credit score to you.

Equifax uses the FICO score, which is the one most often used by banks for credit and loan approval purposes. This score ranges from 300 to 850.

Experian has a credit score known as the Scorex PLUS, and this score ranges from 330 to 830.

Transunion's score is known as New Account Model 2.0, and it ranges from 150 to 950.

Differences in Reporting
The other major factor that affects your credit scores with each bureau is reporting. A creditor or lender might report information to just one or two of the credit bureaus and not all of them. If information is in one bureau's file but not another, that second bureau won't use it to calculate your credit score. They can only use the information that they are sent, meaning that the lenders and creditors must send the information to all of the bureaus.

Also, when reporting your score to you, the bureaus TransUnion and Experian actually give you a different score than the one that banks and lenders will look at; Equifax is the only one that gives consumers the same score that is usually used (the FICO score).

Evening the Scores
Another common question many people have is whether it's possible to make the scores all the same.

It's technically not possible to get three identical scores; and even if the three scores were the same numbers they wouldn't really be the same score anyway. Because of the different ways of calculating scores and the variation in scoring scales, the numbers will always be a little different from one another.

This inevitable difference in scores isn't actually a problem, either. The contents of your credit report are more important to remember than the overall score assigned to it. If you improve your credit report, your scores will improve too. If there are any mistakes in any of the three credit reports, dispute them and ensure that they are fixed. The difference between the three scores should then be minimal.

Effects of Different Credit Scores
If the scores are all different, this will affect your credit to some extent.

You can find out which score the lender pays attention to, since they usually purchase credit scores from one particular bureau, rather than all three. Some lenders will tell you, while others won't, but it's worth a try. In almost every case, however, you can't request that they use a specific score.

The best thing to do to ensure that the difference in your credit scores won't negatively impact your credit is this: make sure your credit reports are error-free. If they are accurate and your credit score is still bad, work on building up your credit rather than trying to dispute the credit score.

At the end of the day, differences in credit scores are totally normal, and your scores don't have to be identical.
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