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Dear Consumer Ed:
I recently applied for a $6,000 loan to pay off some credit cards. When the bank pulled my credit score it was 550, but when I pulled it from TransUnion, it was over 200 points higher. How is that possible? Which is correct?
Consumer Ed says:
In the U.S., there are three national credit bureaus (Equifax, Experian and TransUnion), each of which has a credit score for you. The credit score from each credit reporting organization is based only on the data in your credit report files at that agency. As a result, your credit score may be different at each of the three main credit reporting agencies.
Often, scores are different because the consumer pulls a score from bureau A, while the bank pulls a score from bureau B. In your situation, your lender likely didn’t pull your credit score from TransUnion. The best way to find out where your bank got the score it came up with is to ask which agency’s report it used.
Making matters even more complicated is the fact that there are actually dozens of different credit scores out there, which weigh various components differently. For example, an insurance company is looking for a consumer’s likelihood to file an insurance claim, whereas a credit card company is interested in how you will handle a higher credit limit. Furthermore, banks and other lenders may customize scores, so even Experian credit reports pulled by two different banks might be different.
When comparing scores across bureaus, keep in mind the following points:
- The scores should be accessed at the same time. Credit scores pulled at two distinct points in time will be different. The longer it is between when two credit reports are generated, the greater the chance that the score will have changed.
- All of your credit information may not be reported to all three credit bureaus. The information on your credit report is supplied by lenders, collection agencies and court records. Don't assume that each credit bureau has the identical information pertaining to your credit history.
- You may have applied for credit under different names (for example, Robert Jones versus Bob Jones) or a maiden name, which may cause fragmented or incomplete files at the credit reporting agencies. While in most cases, the credit bureaus combine all files accurately under the same person, there are many instances where incomplete files or inaccurate data (Social Security numbers, addresses, etc.) cause one person's information to appear on someone else's credit report. Lenders report credit information to the credit bureaus at different times, often resulting in one agency having more up-to-date information than another.
- The credit bureaus may record, display or store the same information in different ways.
You should check your credit reports and scores from all three credit bureaus regularly. If you notice that a score has lowered significantly, review your credit report. If there are unexplainable discrepancies, there’s a possibility that you’ve been the victim of identity theft, or that your report contains inaccurate information. If you do spot an inaccuracy, contact the applicable credit bureau. Federal law gives you the right to challenge information on your credit reports. If the creditor or credit bureau cannot verify the information in question, the credit bureau must remove it from your report. For more information about how to correct inaccurate information on your credit report, visit www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports...more>
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