Why Your Credit Ratings Are Different at the Three Bureaus
So you’ve checked your credit rating with three major bureaus, and you find something interesting: All three are different. What gives?
Typically, your grades at the three main bureaus – TransUnion, Equifax, and Experian – should be relatively the same. But they may differ, sometimes quite a bit, depending on what information the bureau has about you. Credit Officer Gerry Detweiler elaborates:
“Since lenders are not required to report to all three agencies, some may, for example, only report to one or two. But the more likely reason they differ is because each agency uses a different credit rating model to generate the score, and each model may weigh the information slightly differently . ” For example, one scoring model might ignore all paid collection accounts, while another might ignore collection accounts where the original balance was less than $ 100, Detweiler said.
Each bureau issues a score based on the FICO algorithm, but the information for this method is based on information held by the bureau. So if the information changes, so will your account.
If the numbers jump a lot, you should carefully review the lowest-rated report to make sure there are no errors.
Moreover, you need to be sure to look at the correct assessment first. As the FICO points out, not all grades are FICO grades, so you need to be sure you are comparing apples to apples.
Check out Credit.com’s publication below for more details.
Why are my credit ratings so different? | Credit.com