Why Are My Scores Different Across Credit Reporting Agencies? Shouldn’t They Be The Same?
Credit scores are built using credit data at each of the three major U.S. credit bureaus – Equifax, Experian and TransUnion. These credit bureaus compile information supplied to them by data suppliers. These suppliers include credit grantors, collections agencies and public record sources.
Credit grantors include credit card issuers, retail credit cards, mortgage lenders, auto finance companies, and student loan lenders. Collection agencies report the accounts they are in the process of collecting. Public records include tax liens, judgments, and bankruptcies.
Credit scores are 100% dependent upon the credit data in both score development and in scoring the credit report, Scores at each bureau differ due to several reasons: the data is updated by the credit bureaus at different times, the credit bureaus don’t receive data from the same suppliers, and the inquiries are not the same at each bureau. And, finally, the models used to calculate scores are not the same, across bureaus and across score developers; FICO and VantageScore Solutions.
Data updated at different times
The data furnishers may not report to the credit bureaus at the same time of the month and/or the credit bureaus update cycles could also vary. This results in the date the account is updated to vary from bureau to bureau. So, even if the accounts on all three of your credit reports were identical, there’s no guarantee that they would all be updated at the same time of the month.
Don’t receive data from the same suppliers
Most of the major credit grantors report to all three credit bureaus. But, not all credit grantors and collection agencies report to all three credit bureaus. There is no law that states that the data suppliers have to report their information to the credit bureaus; it is voluntary. Some companies prefer to report to one of the credit bureaus. These companies are usually smaller.
Since most companies review credit reports from one credit bureau, only that bureau will have the inquiry posted. Therefore, if you compare the inquiries at each credit bureau, they will differ. The exception is the mortgage industry, which obtains credit reports and scores from all three credit bureaus. The number of inquiries is a factor that is considered by credit scores and an inquiry that indicates you are seeking credit can be considered somewhat negative.
Missing data can be an advantage or disadvantage – it all depends upon whether the data missing is negative or positive. Obviously missing negative data can help your score. Since the scores are dependent upon the information on the credit report, and if the bureaus don’t have the same data, the magnitude of the difference will likely impact the score.