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Why Your Credit Score May Differ Among Agencies


At some point in time, you will need to obtain a credit report. Most financial experts suggest that consumers should review their credit reports annually to make sure there are no errors or omissions listed on the report. Each of the three credit reporting agencies offer consumers glimpses at their credit reports using the websites. You may realise that your score differs slightly from agency to agency. This is due to a number of factors.

Each bureau is independent of, and competes with each other and this could cause differences between the reports of the three credit bureaus. Each bureau prides itself as having the consumers' definitive credit report, so for the bureaus, it is not in each other's interest to have the same score. Creditors submit your information to the reporting agencies, and these details are used to determine your credit rating.

While all agencies base their scores on this information, they all use different formulas to calculate your credit score. The reporting agencies have formulas that assign value to different factors, and the variations in your credit scores is a result of these different weightings. While based on the same model, all three agencies use different software in credit reporting. The mathematical algorithms may be secret, but the credit scale is not: The scores range from 300 to 850, with 850 being top-of-the-line borrowing power. Because credit scores for some consumers can vary positively as much as negatively, the agencies and some consumers are against the standardization of credit reporting.

Another reason why your score may be different is the fact that the financial information available to each credit agency differs from day to day. For example, your TransUnion score was pulled first and then 30 days later, your Experian score was pulled, and the resulting credit score was lower than your TransUnion score. This could be because you paid a bill late just before the Experian score was pulled, thus resulting in a lower score. Your late payment lowered your credit score, but it did not become a factor until your Experian score was pulled. This accounts for the difference between your scores. If you discover discrepancies in your credit reports that concern you, it is advised that you discuss these with a trusted financial expert, such as a credit counselor. Small differences can become a major issue if your score is on the border and you are points away from being denied credit. Your credit counselor can help you figure out why your credit ratings show such variation, and might be able to help you find mistakes on one of your credit reports that might affect your score.

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