Ask an expert: Why does my credit score differ?

A: Your credit score will change depending on variations in your credit report, which credit bureau issued it and who is evaluating it.

The three credit bureaus in the U.S. are Experian, Equifax and TransUnion. These companies gather information about you from creditors and public records to compile a credit report. A complex mathematical calculation is then applied to features of your report. The resulting number is your credit score.

The three bureaus don’t necessarily use the same system to come up with your score. There are many versions of the process, each using different factors and weightings to arrive at your score; this results in inconsistencies between bureaus. For example, Equifax uses the FICO system and Experian uses PLUS. Both use the same principles but have different scales, so your FICO score is between 300 to 850 compared to PLUS’s range of 330 to 830.

In addition, the bureaus receive new information constantly and your credit report and score change as a result. Your creditors may not give your information to all three of the credit bureaus or may not relay it to them at the same moment in time. Therefore each bureau may have different information. These discrepancies can result in a difference of 50 points or more among the three company’s scores.

Scores from the three bureaus may also vary if the information in your report is incorrect. You should check your credit report frequently -- particularly before requesting a loan -- and correct any mistakes.

Further variations in your report and score can occur when the credit report companies sell them to landlords, insurance companies, auto lenders, credit card companies, mortgage lenders and others. Each purchaser may reevaluate your credit score using its own criteria. For example, credit card companies place greater importance on your credit behavior whereas auto lenders factor in things like down payments on loans, debt-to-income ratio and how long you’ve been at your job.

Lenders also have different methods for handling multiple scores from the three bureaus. Some discard the highest and lowest and go with the middle figure while others have a formula they apply to the numbers.

 

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