Q: I have three different credit scores with the three credit reporting agencies. Why is it that someone can have three different credit scores?
- Mike G.
A: Mike, this is common question, probably perpetuated by repeated TV commercials for companies that offer “free” credit scores.
To produce a credit score, companies use complex formulas to interpret data on consumers’ credit reports, which are available through the three major U.S. credit bureaus — Equifax, Experian and TransUnion.
FICO, arguably the most well-known credit scoring company, sells credit scores based on your credit report data at each of these credit bureaus. In theory, each of your three FICO scores should be the same. But, in actuality, that isn’t the case.
Any differences in the data collected by these three credit bureaus will generate different credit scores. Because each credit bureau collects your credit data individually, there is no guarantee that the information recorded at one credit bureau is the same as the information retrieved by another.
For instance, you may see vastly different credit scores if one credit bureau was alerted to a late credit card payment while the other have not yet recorded that infraction. This is possible if lenders report your credit information at different times of the month.
Inaccurate or incomplete information collected by one bureau but not another is also one way that causes your credit scores to vary. This can happen when you use different names or have a name that is similar or the same as someone else.
Other data, such as those from collection agencies and court records, can differ from credit bureau to credit bureau.
Finally, if you’re going to compare your credit scores, purchase them at the same time from the three credit bureaus. By looking at your credit score at different times from different bureaus, you won’t be properly tracking the improvement and worsening of your credit profile.