Sunday, September 22, 2013

Why Are Credit Scores Different Between Agencies?

Why Are Credit Scores Different Between Agencies?

Your credit score is calculated by the credit reporting agencies from the information in your credit report. Your score may differ depending on which credit reporting agency is providing it.

Facts

    Some of your creditors may not report your accounts to all three credit bureaus. Because of this, your credit reports may not all reflect identical information and your scores may vary.

Types

    Each credit bureau offers two scores: a FICO score and a consumer credit score. The credit bureaus will calculate consumer credit scores by their own formula, while FICO scores are calculated by the Fair Isaac Corporation.

Considerations

    If one of the credit bureaus is reporting an error, your score for that agency's report may be significantly different from your other scores.

Effects

    Lenders know that each credit reporting agency will often assign you a different score. If you are attempting to borrow a substantial amount, your lender is likely to pull all three of your credit scores to review.

Warning

    Credit scores that you pull from anywhere other than the credit reporting agencies will always be different from your actual scores due to the fact that these scores are "estimated" rather than actual scores.

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