Why Your Credit Scores are Different Between Agencies?
Credit scores are different between agencies for a number of reasons. The main reason is that agencies use different scoring models. Other reason includes that the credit score may be from a different date, the scores may have been calculated using different reports, different personal information entered by a borrower in applying for different credits at different lenders, and the fact that credit bureaus don’t share data with each other. Check your score and start building it.
What is a Credit Bureau and Why are Credit Scores are Different Between Agencies?
A credit bureau is a company that collects and maintains individual credit information and sells it to lenders, creditors, and consumers in the form of a credit report. Credit scores are different between agencies due to various factors such as different scoring models used by agencies, changes in credit scores at any time, different credit reports used by lenders, different personal information entered by borrowers and confidentiality of gathered data between agencies.
The main reasons credit scores are different between agencies is due to the different scoring models. There are many different scoring models used by bureaus and can result in different calculated credit scores. Examples of major scoring models are FICO Score, VantageScore, VantageScore scale (versions 1.0 and 2.0), Experian’s PLUS Score, TransUnion New Account Score 2.0 and Equifax Credit Score.
What Does FICO Mean?
FICO Score was created by Fair Isaac Corporation and is used by 90% of top lenders. Its scores are calculated based on information in consumer credit reports maintained at the credit reporting agencies. FICO Score ranges from 300-850.
VantageScore competes with FICO score and was created by Experian, Transunion, and Equifax.
FICO Score and VantageScore use much similar information in calculating credit scores. However, VantageScore is used by lenders in determining the future financial risk if they were to extend an offer of credit to a customer.
Credit score range also varies in different scoring models:
- FICO Score range: 300-850
- VantageScore 3.0 range: 300–850
- VantageScore scale (versions 1.0 and 2.0): 501–990
- Experian’s PLUS Score: 330-830
- TransUnion New Account Score 2.0: 300-850
- Equifax Credit Score: 280–850
Different Credit Agency Reporting Factors
There are other reasons credit scores are different between agencies. One of such reasons is that the scores are from different dates. This factor could also result in differences in the credit scores reported by the agencies due to constant credit score changes which may occur at any time depending as the individual repay (or fail to) their debt on time. Another reason is that the different scores were calculated utilizing different reports. Lenders only report to one or two of the national credit bureaus which could result in missing information that can affect credit score positively or negatively.
If different personal information on an individual is available to different credit bureaus, it is also a reason credit scores are different between agencies. Fragmented files or files lacking key credit information at different credit bureaus is quite common and this may be due to different personal information entered by a borrower in applying for different credits at different lenders. This can in turn can affect the credit information. Personal information that may be different includes names, nicknames, social security numbers, addresses and many more. Lastly, credit bureaus do not share their collected data with each other and this could also contribute to reasons why credit scores vary between agencies.