Why Credit Scores Vary With Credit Bureaus

Why Credit Scores Vary With Credit Bureaus | by Jim Catalano

If you’ve applied for a mortgage, you know that the lender will obtain a credit report from all three major credit bureaus. The three credit bureaus are TransUnion, Experian, and Equifax.

The common thread I see with all three credit bureaus is the difference in the credit scores. It is not uncommon to see credit scores vary by 100 to 200 points from bureau to bureau.

Why so much? There are several reasons for this.

Credit Reporting

The first reason is not all creditors report their information to all three credit bureaus. If they do report on all three credit reports, it’s not uncommon for the information reported to be different. For example, let’s say you have a credit card that you paid off a year ago. This would be a positive action to your credit score. If it was reported to TransUnion and Equifax but not Experian it is likely your credit score will be lower on Experian.

Scoring Models

The second reason is that all three bureaus have different scoring models which can result in a different credit score.

Credit Information

The third reason is each credit bureau has its own way of assigning reported information to a given creditor. This is necessary because lenders are not always able to provide full social security numbers or complete account details. Also, people have had accounts under different names because of marriage or variations in their name or completely different addresses. It’s fair to say that the correct information does not always follow the person.

When it comes to purchasing a new home, I recommend you take the time to meet with your lender and review your credit. A good mortgage professional will help make sure there are no red flags that could adversely affect your home purchase or obtain the best mortgage interest rate possible.

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