Equifax vs. TransUnion Credit Score: The Differences Explained

Did you know that almost 4 in 10 Americans don’t know how credit scores work? For those who are in the same boat, you may find your Equifax vs. TransUnion scores to be confusing. Why do you have more than one score anyway?

Read on to learn everything you need to know about these major credit bureaus.

The Three Credit Bureaus

Every credit-reporting bureau does the same thing. They take public records, combined with other sources, to develop a credit report and score. This is what lenders use to decide whether or not they should extend credit to you.

Even though each agency/bureau creates its own credit report, no agency is more important than the other. The big three when it comes to consumer credit bureaus are Equifax, Experian, and TransUnion. However, there are other credit reporting companies out there.

In this guide, we discuss Equifax vs. TransUnion because they are the two major national credit agencies.

Why Do I Have Different Credit Scores?

When checking your credit score, you may find that your TransUnion and Equifax scores vary slightly or vastly. This could be occurring for several reasons, such as:

Different Credit Scoring Models

Every credit reporting agency will use property scoring models. This is no different when it comes to Equifax vs. TransUnion. However, these agencies may use this model to weigh each factor differently.

For example, the number of accounts you have or your payment history may be scaled differently depending on the agency. As the model differs, the results do the same.

Other factors used in determining your credit score include the length of credit history and credit card utilization.

Different Information

The TransUnion and Equifax credit bureaus may have different information. It is possible for one not to have as much information as the other. This depends on the information that the lenders report.

A lender may use all three credit bureaus or just one or two. It is also possible to update bureaus at different times, leaving you with two different credit scores.

Different Dates

Most people are unaware that your credit score is not always up to date. Generally, a score is based on what your credit profile was at one point in time. When you compare two different credit scores from different bureaus, you must consider the time period.

Equifax vs. TransUnion: Is One More Accurate?

The short answer is no; a credit bureau’s credit score is valuable and as accurate as another. When it comes to credit score accuracy, every bureau holds its own and maybe preferred by a lender.

A lender often chooses a credit score to gravitate to, but this does not mean one is better than the other. It is important to remember that other factors come into play regarding credit situations and applications.

What Credit Score Is My Lender Using?

It could be hard to tell which credit score your lender uses to accept or deny your applications. They are not obligated to tell you, but it is worth a shot to ask.

If a lender denies you, the lender must explain why you were denied under federal law. They also must tell you the numerical credit score used to deny you. From there, you can figure out which credit bureau your lender is using.

The law also requires a lender to provide you with the credit reporting company that wrote your report. You also have a right to receive that report. A lender must also teach you how to fix mistakes on the report and add other information to it if necessary.

Once you receive your credit report, you can look for errors. You can dispute these errors to require the agent to investigate and correct the errors.

When Should You Check Your Credit Reports?

If you are suspicious about your credit score accuracy, it may be worth checking your credit reports. If you check your Equifax and TransUnion scores, it is normal for them to be slightly different. However, a bigger difference may be worth looking into.

You can get a credit review to ensure the information on every account is accurate. If you don’t regularly review your reports, it is a good idea to start now. When you read them more often, you are better suited to catch inaccuracies like a fraud.

If the information on your credit reports is accurate, but you cannot get approved by a credit lender, it may be worth looking into credit repair services.

Why Do I Have Bad Credit?

A bad credit score, whether it is your TransUnion or Equifax score, can lead to roadblocks. You are more likely to get rejected when asking for loans and higher lines of credit. You may also get rejected when filling out a rental application or be asked to put down a hefty security deposit.

The biggest reason you may have bad credit is because of your payment history. Paying bills late or missing payments can plummet your credit score.

Your scores are also affected by the total credit you have available and how much you continue to use. This is known as the credit utilization rate.

Scores are determined based on the items above, plus how long you’ve been using credit, credit types used, and the number of accounts you have.

Need Credit Help?

When it comes to Equifax vs. TransUnion, both bureaus are accurate and just as important as the other. A slight difference in these scores is not usually a cause for concern. If you see a major difference when checking your credit scores, check your credit reports and decide if you need credit help.

The Credit Agents are professionals that can provide you with a free credit review and create a plan tailor-made for you. Contact us today to find out more.