No consumer reporting agency always gives the lowest, highest, or middle credit score.
The scores differ among Equifax, Experian, and TransUnion because they use different models, data, and matching methods.
Comparing the data from the three scores can show ways to improve your creditworthiness.
Examine the report with the lowest score to identify negative entries that might not belong to you. Inspect the report with the highest score to find missing positive information.
Contact the bureau to remove incorrect negative information or add missing positive history.
Lowest Scoring Bureau
The consumer reporting agency with the lowest credit score often has more negative entries. Examine your file from this bureau to find information that does not belong to you.
Private lenders often use this bureau because they take on the risk of car loans, personal loans, and credit cards. One default can offset the profits from twenty accounts that pay on time.
More Derogatory History
The credit bureau with the lowest score often shows more negative payment information. Payment history makes up 35% of your score.
Private lenders report various payment status codes.
- Delinquency: A payment that is at least 30 days past due
- Charge Offs: When banks deem an account unlikely to be paid
- Repossessions: When the lender takes back a car
- Foreclosure: When a bank takes ownership of a house
- Collection Accounts: When a lender sells past-due receivables
Public records entries come from county courts nationwide.
- Bankruptcy: A legal process that eliminates all or part of your debt
- Chapter 7: Selling assets to repay some of your debts
- Chapter 13: Restructuring debt to lower monthly payments
- Judgments: A court order allowing debt collectors to use stronger tools
- Wage garnishment
- Property liens
Higher Debt Balances
The credit bureau with the lowest score tends to show accounts with higher debt balances. The amounts owed make up 30% of the calculation.
Two types of debt utilization ratios impact your score.
- Revolving debt utilization is the outstanding balance on your credit cards at the end of the billing period divided by the account limit. This ratio fluctuates every month.
- Installment debt utilization is the outstanding balance on your loans at the end of the billing period divided by the original principal. This ratio declines every month.
More Hard Inquiries
The credit bureau with the lowest score tends to show more hard inquiries on file. Hard inquiries precede new credit activity, which makes up 10% of the calculation.
- The models ignore shopping inquiries when consumers compare interest rates from multiple lenders before buying a car or house.
- The scoring equations ignore soft inquiries when consumers examine their reports or when lenders make pre-approved offers.
- The models subtract about five points for hard inquiries when consumers apply for credit from a lender who checks a report from a specific bureau.
Many lenders check only one report per application, so the hard inquiry shows on one bureau file but not the other two. Inquiries are often unique to one agency, unlike other data elements.
Middle Scoring Bureau
The consumer reporting agency with the middle credit score is less likely to have unique elements. It may not have extra negative entries or missing positive information.
Mortgage lenders use the middle score because they do not take on the risk. They quickly sell mortgages to Fannie Mae or Freddie Mac and follow their rules. So, improving this bureau’s report when buying a house is essential.
Split Files
Homebuyers can improve their middle credit score by adding positive information missing from that bureau’s report. Accounts that lengthen history or add diversity are beneficial.
When the bureaus match personal information, they sometimes split files: data from one person appears in two reports. The agency with the highest score is the best place to look for missing positive data.
Contact the bureau to file a dispute. Tell them that account X from bank Y belongs to you. Include copies of billing statements to make your case.
Merged Files
Homebuyers can improve their middle credit score by removing negative information that does not belong to them. Trade lines with a derogatory payment history or high debt levels are harmful.
When the bureaus match personal information, they sometimes merge files: data from two people appears in one report. The agency with the lowest score is the best place to find negative data from another person.
Contact the bureau to file a dispute. Tell them that account X from bank Y does not belong to you. If possible, point out any name, address, date of birth, or social security number errors.
Highest Scoring Bureau
The consumer reporting agency with the highest credit score tends to have more positive entries. Examine your file from this bureau to find information missing from the other two reports.
Private lenders are least likely to use this bureau, but their report may contain helpful clues to boost your score.
Longer History
The credit bureau that scores highest may have additional accounts with longer histories. The length of history makes up 15% of the calculation.
Suppose you opened a credit card account when you turned eighteen while living at home with your parents. Years later, you got married and moved in with your husband.
- Your name changed
- Your address changed
The consumer reporting agencies do a great job of tracking people despite various name and address changes, but their systems are imperfect. One bureau report could easily omit a credit card with a lengthy history.
Greater Diversity
The credit bureau giving you the highest score may have an additional trade line from a unique account type. Credit mix makes up 10% of the calculation.
Suppose you took out your first personal loan, an unsecured installment arrangement. Then, the data entry clerk at the lender transposed digits on your date of birth and social security number.
The consumer reporting agencies do a fantastic job of handling transposed digits, but their systems are imperfect. One bureau report could easily omit the unsecured personal loan, boosting your account diversity.
