What causes credit scores to differ between the major credit bureaus?
Credit scores can vary between the major credit bureaus (Equifax, Experian, and TransUnion) for several reasons:
Different Scoring Models: The credit bureaus may use different scoring models to calculate credit scores. While FICO (Fair Isaac Corporation) scores and Vantage scores are widely used, each bureau may use a different version of the FICO/Vantage score or even have its proprietary scoring model. FICO/Vantage periodically updates its scoring models, and not all bureaus adopt the latest version simultaneously.
Varying Data: The information on your credit report may not be identical across all three bureaus. Creditors may report information to one or two bureaus, and there may be variations in the timing and accuracy of the data reported.
Creditors Reporting Practices: Some creditors may report to only one or two bureaus, not all three. As a result, the credit information available to each bureau can differ.
Differences in Reporting Dates: Creditors may report information at different times to each bureau. If a significant change in your credit status occurs just before or after a reporting date, it might be reflected in the score from one bureau but not in others until the next reporting cycle.
Not all Lenders Use All Bureaus: Some lenders may pull credit reports from only one or two bureaus when making lending decisions. If your lender checks your credit with a bureau that has slightly different information, it can result in variations in your credit scores.
Algorithm Differences: Even when using the same scoring model, slight variations can occur due to differences in how the bureaus implement the model. The algorithms may weigh certain factors differently.
Because of these differences, it's not uncommon to see variations in credit scores between the major credit bureaus. However, these differences are usually not significant, and the overall trends in your creditworthiness are likely to be similar. It's still important to regularly check your credit reports from all three bureaus to ensure accuracy and address any discrepancies.