One of the most frequently asked questions we receive is: “Why are my credit scores different?”
There are several factors that can contribute to differing scores:
- By law, lenders are not required to report to all three major credit reporting agencies. In fact, they are not required to report to any bureau at all. While most major creditors do report details about your accounts to all three bureaus, others may only subscribe and report details to one or two of the bureaus – resulting in different scores across the three bureaus.
- The second factor that could contribute to credit score differences is the scoring model used. Two of the most commonly used scoring models are the FICO® score created by Fair Isaac Corporation and the VantageScore® created by Equifax®, Experian®, and TransUnion®. Some lenders opt to use one or the other when determining your credit worthiness.
- As if different scoring models did not complicate things enough, there are several versions of each scoring model. Some put more weight on different categories that make up a credit score. FICO® has even gone as far to provide industry-specific scores geared towards auto, bankcard, and mortgage decision-making.
- An additional factor that could play into your score is the date of report or score. Credit is fluid, and ever-changing. Creditors are constantly reporting information about your tradelines to the bureaus. From one day to the next, your credit report is subject to change – ultimately affecting your score.
- Lastly, when transposing information from the creditors to the bureaus, errors can occur, which can result in differing scores across the bureaus. This is why it’s very important to review your credit reports. In the case that errors are identified, be sure to dispute inaccuracies by mail or contact a professional consulting agency like Credit Location to dispute information on your behalf.
While all of the aforementioned factors can contribute to differing scores, there are things you can do to maintain a healthy score.
- Pay your bills on time
- Limit your credit card utilization
- Keep aged accounts open
- Maintain a diverse credit profile
- Limit your applications for new credit
