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Equifax, Experian, and TransUnion: Credit score systems vary

You are entitled to one free credit report a year from each of the three major credit reporting agencies – Equifax, Experian, and TransUnion. However, if you would have your credit rating or credit score pulled once from each of these three agencies, you would likely find that your score differs somewhat among the three agencies. Why is this?

A person’s credit score, or credit ranking, is based upon personal financial information, such as bills and debts owed, lawsuits and bankruptcies, and other incidents. The credit score is calculated by using a mathematical algorithm that assigns different weights or points to different aspects of a person's financial history.

There are two primary reasons why your credit score will vary among Equifax, Experian, and TransUnion:

The first, and most compelling reason for score variance is that the financial information available to each credit agency differs from day to day. Suppose your TransUnion score was pulled first. One month later, your Experian score was pulled, and the resulting credit score was lower than you TransUnion score. However, you paid you electricity bill late just before your TransUnion score was pulled. Your late payment lowered your credit score, but it did not become a factor until your Experian score was pulled. This accounts for the difference between your scores.

The second, and more hotly disputed reason for score variance is the difference in credit ranking calculations between each credit reporting agency. TransUnion, for example claims that Equifax, Experian, and TransUnion all use different algorithms to calculate credit scores. However, other sources, such as, claim that there is no difference in the way FICO algorithms are designed or applied. states that confusion arises because each credit reporting agency calls the algorithm by a different name – but it is the same algorithm.

It is important to discuss score discrepancies with a trusted financial expert, such as an Advantage CCS credit counselor. Small differences can become big discrepancies if your score teeters on the border and you’re literally points away from being denied credit. Your credit counselor can help you figure out why your credit ratings show such variation, and might be able to help you find mistakes on one of your credit reports that might affect your score.

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