Did you know that in the U.S. there are three national credit bureaus that compete to capture, update and store credit histories? These three credit bureaus are: Equifax, Experian and TransUnion.
Are there differences between the 3 Credit Bureaus?
It’s important to understand that while most information collected by these three is similar, there are differences. For instance, one credit bureau may have unique information captured on a consumer that is not being captured by the other two, or the same data element may be stored or displayed differently by the credit bureaus.
For example: The FICO scoring system design is similar across the credit bureaus so that consumers with high FICO Scores on bureau "A's" data will likely see a similarly high FICO Score at the other two bureaus.
What happens when scores are significantly different across bureaus?
It is likely the underlying data in the credit bureaus is different and thus driving that observed score difference. However, there can be score differences even when the underlying data is identical. Why? Each of the bureau’s FICO scoring system was designed to optimize the predictive value of their unique data.
Keep in mind the following points when comparing scores across bureaus:
  1. Not all credit scores are "FICO" scores. (make sure the credit scores you are comparing are actual FICO Scores)
  1. FICO scores should be accessed at the same time. (a “week-old” score may already be “dated”).
  1. All of your credit information may not be reported to all three credit bureaus. The information on your credit report is supplied by lenders, collection agencies and court records.
  1. You may have applied for credit under different names (for example, Robert Jones versus Bob Jones) or a maiden name, which may cause fragmented or incomplete files at the credit reporting agencies. While, in most cases, the credit bureaus combine all files accurately under the same person, there are many instances where incomplete files or inaccurate data (social security numbers, addresses, etc.) cause one person's credit information to appear on someone else's credit report.
  1. Lenders report credit information to the credit bureaus at different times, often resulting in one agency having more up-to-date information than another.
  1. The credit bureaus may record, display or store the same information in different ways.

If you’re thinking about buying a home. Get to know your credit score better and how to improve it! Learn more here. Give Greenway Mortgage a call to discuss your credit score in detail. There are many different ways we can help. 908.489.4658.