Credit Score Differences

Having good credit isn’t just important, it can be essential to getting a home, vehicle, or paying much less in interest over the life of a loan. Understanding how your credit report information impacts your credit score, and more importantly what you can do about it, is information everyone should know.

Why your credit reports and scores may differ

There are three major credit bureaus keeping information which goes into your credit reports: Experian, Equifax, and TransUnion. While a creditor will report to one or more of these bureaus, they may not report a particular account’s history to all three. This can impact your ability to get credit, because each bureau may have different pieces of your overall credit picture based only on the information reported to them. The three different agencies also maintain their own, independent, databases on the information they receive. Consequently, each bureau may generate a different credit score at any given time.

Each credit bureau may also use a different method to calculate a credit score. The most common, and industry standard, is the FICO score. Your FICO score is a number ranging from 300-850 which encapsulates your overall creditworthiness, or likelihood to repay your debts. There is also the VantageScore which generates a number ranging from 501-990, and attaches a corresponding letter “grade” (F-A) to a specific range. Other non-FICO type scores are available from credit agencies, but due to their relative newness, and the mainstream dominance of the FICO score, they are often referred to as “FAKO” scores. Because of non-FICO scores not enjoying the same popular status, they are usually offered to lenders and consumers at a discounted price.

What you can do to impact your credit reports

First of all, you need to know what is contained in each of your three credit reports. You are entitled to a free report from each bureau, every 12 months. Once you have the information on each report, you will have a better picture of which lenders are reporting to which credit bureaus.

Since individual creditors may not subscribe to all three bureaus, you have two options when it comes to “leveling” your credit accounts across all three reports:

1- You can ask the creditor to report the account to all three bureaus:

This may pose a problem, and has brought some mixed reviews from people. Some say they have asked their creditor to report the account to an additional bureau (or bureaus), and they have done so with no problems. On the other hand, since a creditor may only subscribe to one or two credit bureaus, they may not be able to add it to one which they don’t subscribe.

2- You can request that the credit bureau which doesn’t show your account begin to report it:

Once again, this is not a certainty. Some say the credit bureau is required to report the account, provided they can verify it. This may also cost you a fee. However, others have tried to get a specific bureau to report an account, but have found the bureau places the onus on the creditor to subscribe to their service. In other words, if the creditor doesn’t report it to them, they claim to have no obligation to place the account on your report.

Ultimately, if you’re concerned about having your accounts show up on all three reports, the best advice is to ask them if they report your information to all three BEFORE you apply for credit with them. Many companies use this as an incentive to attract customers, and it’s the best way to know your credit reports are as balanced as they can be.

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