Once you start looking at your credit scores you’ll see multiple credit scores from different bureaus. Small differences between the scores probably won’t alarm you, but what if you see a big variance? You could be left wondering if one bureau’s score is more significant than the others. In this article, we’ll break it down for you.
What is a Consumer Credit-Reporting Agency?
All agencies basically do a similar thing. They use public records and other sources to generate a credit report and score so lenders can use it to help gauge the risk in lending people credit. The first thing to know is each credit bureau creates its own proprietary report, but no single agency is more important than another.
The big three consumer credit bureaus most people are familiar with include TransUnion, Equifax, and Experian. But in reality, nearly 50 companies appear on the Consumer Financial Protection Bureau’s list of consumer reporting companies. Probably the two biggest ones that get the most attention are TransUnion and Equifax.
Why are My TransUnion and Equifax Credit Scores Different?
To understand the discrepancies between two of the major credit bureaus you first need to know the different factors that are considered by both when calculating your overall score.
Different Models Equal Different Scores
Like all credit-reporting agencies, TransUnion and Equifax use their own proprietary scoring models. While credit scores are mostly based on the same or similar factors such as payment history, the number of accounts in good standing, each agency’s scoring model can weigh those factors differently.
Not all credit reporting companies will have the same exact information about you, or receive it in their system at the same time. Some lenders will report information to all three big credit bureaus, while others may only report to one or two.
TransUnion vs. Equifax: Which is most accurate?
The truth is no credit score from any one of the credit bureaus is more valuable or more accurate than another. It’s certainly possible that a lender may lean towards one agency score over another, but that doesn’t necessarily mean that score is better.
Keep in mind that while a lender may prefer credit reports and scores from a specific bureau, each situation and application is different, with multiple variables to take into consideration.
Need Help Tuning Up Your Credit Score?
When you partner with a credit score counseling agency, you can save a lot of time and money, speed up your credit tune-up process, and learn strategies that will help you in the long-term future.
Credit Expert LLC has helped countless individuals tune up their credit scores. We can help you raise your credit score to 700 and beyond.