Why credit scores differ between credit-reporting agencies

Woman wonders why credit scores differ between different agenciesImage: Woman wonders why credit scores differ between different agencies

In a Nutshell

FICO® credit scores are just the tip of the iceberg. Lenders also use dozens of other credit scoring models when you apply for a credit card, mortgage or auto loan.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

These three-digit numbers can go a long way in determining whether a lender will do business with you.

The problem is, there are so many credit scoring models out there. How can you keep track of them all?

First things first: It’s perfectly normal for scores to differ slightly between agencies. It’s up to lenders to decide which information they report to the major credit agencies — and which agencies they report to in the first place. Since your FICO Scores depend on the data listed on your credit reports, you might not see the exact same score from every credit-reporting agency.

The good news? Many agencies look at similar factors when calculating your credit scores. So long as you make payments on time, keep your credit card balances low and don’t go wild opening new credit card accounts when you don’t need them, you should be in good all-around shape.

So, listen up (and note that the following discussion only relates to credit in the U.S.).

Let’s start with your FICO credit scores

The Fair Isaac Corporation introduced the first general-purpose credit score in 1989. Known as the FICO Score, it filters through information in your credit reports to calculate your score.

Since then, the company has expanded to offer 28 unique scores that are optimized for various credit card, mortgage and auto lending decisions.

OK, but what about my other credit scores?

The other main scoring model you’ll run into is the VantageScore. The three major credit-reporting agencies — Equifax®, Experian®, and TransUnion® — teamed up in 2006 to create the independently managed firm VantageScore Solutions.

While each of these credit-reporting agencies calculates your credit scores differently, they all focus on how responsible you are with the money you borrow.

Why are my credit scores different?

There are a few reasons why you might get different credit scores from FICO and each of the three major credit-reporting agencies. Here are some of the most common situations:

  1. Scores are from different dates. Since your scores might change at any time, it’s important to compare credit scores from the same date.
  2. Scores are calculated using different scoring models. Keep in mind, there are dozens of credit scoring models out there that may calculate your score a little differently.
  3. Scores are calculated using different credit reports. Some lenders report to all three major credit agencies, but others report to only one or two. This means a credit agency may be missing information that helps or hurts your score.

We recommend you periodically check your credit reports for errors, which could affect your scores. You can check your TransUnion® and Equifax® credit reports for free on Credit Karma, and your Experian® report on www.AnnualCreditReport.com.

Though your scores may vary, they’re all based on the information provided by the credit-reporting agencies. So, focusing on what’s in your credit reports could help you build your credit across the board.

What’s next?

It can be difficult to keep track of all your credit scores, because there are so many out there, and each score changes over time.

These complicated facets of credit scores are exactly why we developed Credit Karma. We hope to provide you with an easy-to-follow point of reference on your credit health.

Best of all, it’s always free to check your VantageScore 3.0 credit scores and credit reports from two major credit-reporting agencies with us. Checking your credit scores and reports on Credit Karma will never hurt them.

About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. He’s a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa… Read more.