3 Credit Scores and Reports

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Information about you can be different across all three credit bureaus. That’s why you should regularly review your Experian, Equifax and TransUnion credit scores and reports.

Why do we have three different credit scores?

You can have 3 different credit scores from three credit bureaus, and they will typically vary due to the various calculations that each of them uses.

Some bureaus will have access to credit information that others don’t have. The number of hard inquiries on your credit report will be a factor in determining your credit score, and some of the bureaus may not have access to all of them.

In the end, each bureau uses the same scoring system, but they all have different info at their disposal, resulting in a score that can fluctuate between each of them.

Why should you check your 3 credit scores?

Getting your all 3 credit scores can give you a more comprehensive idea of where you find yourself when it comes to credit, and you’ll also be able to see the discrepancies in the data.

Many lenders have no legal obligation to report to all three of the agencies, so your credit scores will likely grow in disparity over time.

Make sure that you check your three credit scores and reports often. You don’t want to end up with the bad credit because of some false information.

What are the major credit bureaus?

Credit bureaus are companies that exist to gather your information and sell it to people who are interested in your credit. Credit bureaus try to learn where you live and work, how you make ends meet to pay your bills, whether you’ve been arrested, and much more.

Once a credit bureau has all of this info, they will compile it into a single credit report, containing all of the data that a potential landlord or lender would be interested in. All of this data is then used by the person or organization who buys it to determine your interest rate, insurance premiums, and much more. The three biggest credit reporting agencies in the United States are Experian, Equifax and TransUnion.

How are my credit scores calculated?

Calculating your credit scores requires quite a bit of data. Let’s go over the five different aspects that go into credit score calculation.

1

Late payments

Lenders are trying to decide that when broken down to its essence, is about how much they can trust you and for how long they can trust you with their money. One of the most significant indicators to your trustworthiness as a lendee is going to be how often you

2

Amount owed

Credit isn’t just based on payment consistency or the past; it also factors in your future. A credit score encapsulates the total of what you still are required to pay in contrast with your income sources.

3

Credit history

While it’s said that having no credit history is bad, having bad credit history is worse. Building good credit history isn’t as hard as you’d think. There are low-risk methods to show credit responsibility that can contribute to a healthy record.

4

Credit type

If you lack depth or length in your credit history, one thing that lenders will consider more heavily is the different types of accounts that you have. The greater the diversity of accounts that you keep in good standing, the higher your score will be and the higher chance of your applications being approved. That said, don’t open a bunch of nonsense accounts just for diversity’s sake.

5

New credit

One point of scrutiny for lenders is those with a limited history that freshly open a more than a couple accounts quickly or have too many inquiries. It’s easy to suspect why lenders are cautious; the lendee comes across as being imprudent. The other problem is that more than a handful of inquiries into the history of your credit in a limited amount of time can cause your score to take a hit.

Knowing how to spread inquiries out will make it less likely to lower your credit score score. Choosing to do it over the course of a month makes it more likely that your applications will be looked at more favorably.