Why Are My Scores Different Across Credit Reporting Agencies? Shouldn’t They Be The Same?

Screen shot 2013-05-14 at 1.45.07 PMCirca 1997, the question posed in this article’s title was one of the questions I was asked during my interview at FICO. Thankfully I answered correctly!

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.

logoCredit 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.

Inquiries differ

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.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  You can follow John on Twitter here.

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