Why are my scores different for the 3 credit bureaus?

Posted by Erica Steeves on October 3, 2018

Why are my scores different for the 3 credit bureaus?

Your Credit Minute Show Notes:

  • 00:00                                   What’s going on guys? This is Nik Tsoukales from Key Credit Repair. Um, thank you for checking out our channel.
  • 00:05                                   So, question of the day is a pretty common one; “Why are my credit scores different for the three credit bureaus?”
  • 00:11                                   And I’ll give you an example, and you’ve probably seen this yourself. So, you’ve pulled up Tri Merge credit report, using maybe smartcredit.com or PrivacyGuard or even myFICO. Okay. And what you notice is your credit scores are different. Experian is 760, Equifax 745, and in this example, ah, TransUnion 752. What gives? I’m the same person. Okay.
  • 00:32                                   The scoring formula, let’s say it’s Fico 4, is exactly the same. So, why are they different?
  • 00:37                                   Well, keep in mind, these are three different organizations, okay? But that doesn’t really affect the scoring formula because, as you know, it’s one scoring formula, especially if you’re on myfico.com. Okay. Um, so if all the data was exactly the same, you’d assume that the three credit scores were the same. But keep in mind your creditors, debt collectors, banks, lenders, they’re not, they’re not all necessarily sending the same data to all three credit agencies. So, you could have a bank that for whatever reason is only sending data to Equifax and TransUnion and for, for whatever reason, they’re not sending that same data to Experian.
  • 01:20                                   Why they’re doing it? Um, various reasons. Is it common? No. Okay.
  • 01:24                                   Also, what you’ll find is sometimes the bank or lender, um, they’ve updated Equifax and TransUnion for this month but they, their systems have, have not yet batched out that data to Experian yet. Okay.
  • 01:35                                   So, you may have, ah, more positive, ah, reporting, more on-time payments reporting to Equifax and TransUnion on one particular trade line versus Experian. Okay.
  • 01:46                                   Other more drastic cases that we see a lot more common were, were we’re seeing scores, you know, from 760 to 660 let’s say, um, are with collections. Okay.
  • 01:55                                   So, let’s say you just incurred a collection. Okay. More than likely, that collection is gonna hit two out of the three credit agencies. It’s extremely common. Okay. The debt collector hasn’t, ah, subscribed to report to all three bureaus. Maybe just to save some bucks they’re only reporting to Equifax or they’re reporting to TransUnion and Equifax or just Experian. Okay.
  • 02:15                                   So, this is gonna happen. And this is why when you go and get something like a home loan, the bank or lender, they’re never gonna use the highest score, they’re never gonna use the lowest score. Typically what they’re doing is they’re taking the median score. The median is the middle of three values. It’s not the middle of the page or the middle of your credit report, they’re usually using the middle of three values.
  • 02:36                                   So, in this case if you went to get a mortgage, the bank or lender is usually gonna use your TransUnion credit score, if they are pulling a Tri Merge report. Okay.
  • 02:44                                   Some other products, like car loans, they might only pull one bureau, they only subscribe to one bureau. But most things, like a home loan, the majority of our clients, you know, they’re always gonna use the median score for this reason, because they will vary.
  • 02:58                                   Typical variations are somewhere within ten points. Okay. If the variations are more than that then that’s something you gotta dig into it. And when you look at that credit report, you have to analyze really, ah, negative marks. Have you had any negative marks and are they reporting to all three bureaus? Okay.
  • 03:14                                   And one way you can figure that out is certain Tri Merge reports, reports that have all three bureaus, they will actually separate the data with Experian, Equifax and TransUnion. So, you can actually compare the three right on a credit report.
  • 03:27                                   Now, if you’re looking at a, a credit report from a home lender, um, they’re usually using a Tri Merge where the data is actually merged. The payment history from all three bureaus will actually be all placed on one line. So you can’t actually see the difference between, ah, TransUnion, Ex-, Ex-, Experian and Equifax. Okay.
  • 03:44                                   If that’s the case then what you can do is you can either subscribe to an online credit monitoring like myfico.com and actually separate that data.
  • 03:51                                   Um, also you can ask your home lender to separate the data for you. So, your home, your home loan office should be able to call the company that they’re using to get their credit report. Some of those companies include, like, [inaudible 00:04:02] or LandSafe. And they can actually ask those companies, the company that put, mashed all the data together on their credit report, to separate the reports and actually submit them to see so you can see, if there is a drastic variation, what is the reason. Okay.
  • 04:18                                   Also … Excuse me. Also, keep in mind, if there is a large variation, like, let’s say this 760, um, with Experian is now a 660 with, with Equifax. But we have the same actual accounts on the credit report. Right away, that’s a red flag that we have some sort of inaccuracy on the credit report. Okay. And that’s something that should be challenged.
  • 04:39                                   So, if one credit agency is saying, “Hey, these payments are on time,” and the other agency is saying, “No, no, no, you have late payments,” well, we have an inaccuracy in some way, shape or form. And those late payments, if they are inaccurate, they need to get removed. So, that’s a pretty big red alert. Okay.
  • 04:55                                   Um, guys, any questions regarding the difference between the three credit agencies, the variations of your credit score, by all means click below. There should be a Learn More button right below here if you’re on, ah, Facebook, and there should be a Click Here Free Consultation button which should be kinda showing up right here.
  • 05:13                                   This is Nik Tsoukales with Key Credit Repair, and this is your Credit Minute. Thanks.