Why are your credit scores different between bureaus?

Why your Credit Scores are different?

If you check your credit scores and they differ by a couple of points between credit bureaus, that is completely normal. However, if they differ by a lot of points, it might be indicating errors on your reports. Hence checking your reports might be more important than just checking your scores.

Why are your scores different based on the sources?

Honestly, your scores can vary for several reasons. One of the most common reasons is the different scoring models- Vantage Score or FICO Score. Those two Scoring Models use different algorithms to calculate your credit scores and they update their models frequently. Since they routinely change their models, all the credit reporting bureaus and lending industries do not use the most updated version.

Let’s look at it like the iPhone. Apple routinely upgrades their systems, and they routinely upgrade the same IOS. Right now, my iPhone is saying that there is a new update for the IOS 16.4.1, and it also tells me the new changes. The only difference is you do not usually know what the algorithms change. So, therefore it is important to know what makes up your credit score, so you have a general idea of what your scores should be.

Read what makes up your credit score HERE!

The reason WHY your credit is being calculated may weigh on your credit scoring factor, hence, you have different credit scores for when you apply for an auto loan, mortgage, or even a credit card.

We’ll break down the difference between FICO Scores and Vantage Scores and more in our next blog. But for now, let’s briefly touch on them.

The most commonly used scoring models are FICO Score 8 and Vantage Score 3.0, and both range from 300-850. However, the newest versions are FICO Score 10 and Vantage Score 4.0 which incorporate utility payments and rent payments. So, based on what scoring model the credit bureau or lender uses, you should see some fluctuation in your scores.

But if you notice radically different scores, I’d advise you to check your Credit Reports for any errors because more than 70% of Credit Reports are reported inaccurately.

Check your trio-merged Credit Reports HERE!

Let’s say you’re ready to start your homebuying process and head to a lender for your pre-approval letter, the lender will check all three credit bureaus- Experian, Equifax, and Transunion. Typically, they would use FICO Score 2 for Experian, FICO Score 5 for Equifax, and FICO Score 4 for Transunion- all three scores would most likely be different. Hence, they usually use your middle score for your approval

Now that we have those out of the way, let’s talk about the not so normal “why” your scores are utterly different:

• Data errors- Credit limit incorrect, open dates errors

• Account changes- New accounts, close accounts, recently paid off accounts, new missed payments, etc.

• Collection accounts- A new collection account reporting on one or two reports, and not all three of them

If you find errors on your reports, you as a consumer, you have the right to dispute any inaccuracies on your report. By law, your credit reports should be 100% accurate!

If you need help disputing errors on your reports, you can find everything you need in our DIY Credit Repair Kit. When disputing errors on your reports, be sure to stay organized and remain consistent. DO NOT GIVE UP!

Ok loves, remember to always monitor your credit reports! Next time, we will talk about the difference between FICO Scores and Vantage Scores. (why your credit karma scores are different from your Experian/MyscoreIQ scores)