Whats the difference between fico transunion and equifax

The three main credit reporting companies areEquifax,TransUnion, andExperian. Each one receives slightly different information from creditors.

Because of this, you might often ask yourself, "why is my Equifax score lower than TransUnion"? Or conversely, you may ask, "Why does TransUnion differ from Equifax?"

People are obsessed with their credit scores for good reason. If you have a good credit score, the better potential creditors view your financial trustworthiness.

Whether you are applying for a credit card, car loan or mortgage, jobs, and even rentals, your interest rate and terms will be far better with a good or excellent credit score. 

Credit scores are not generated randomly. Instead, they are based on your history as a debtor.

Let's take a look at credit scores and credit scoring models, and then look more deeply into the credit reporting agencies or credit bureaus.

Who Are the Credit Reporting Agencies? Understanding Where Your Credit Scores Come From

When you borrow money, your creditor will generally report your payment history to one or all of the three credit bureaus. Once you have at least six months of credit history, your data is subjected to scoring models by either FICO or VantageScore. These three credit bureaus then generate a credit score. 

Credit scores are based on five different factors: payment history, credit utilization, age of credit, credit mix, and application history. This data is subjected to slightly different scoring models, so numbers may vary slightly.

Payment history is the single biggest factor with credit scores, weighted at 35% of your score. If you skip or make late payments your credit history takes a ding. Enough of these dings and your credit score drops. A credit card company will always report late payments!

The second factor is credit utilization. This factor represents 30%of your score. Utilization looks at how much of your revolving debt you are using versus your credit limit.

Revolving debt includes loans like credit cards or home equity loans. The more of your credit limit you are using, the higher the ratio and the lower your credit score.

Age of credit is 15% of your score. You need at least 6 months of credit usage to have a credit report. The older your credit, the better your score. By having credit cards or other personal loans for years improves your score.

Credit mix represents about 10% of your score. Credit mix means that you have a variety of credits including rent or mortgage, credit cards, car loans, etc. 

The last factor is application history (10%). Every application for a credit card or a loan results in credit inquiries or a "pull." Hard pulls, or the release of the full report, temporarily lowers your credit score. Soft pulls do not affect your credit score.

Who Are the Three Major Credit Bureaus?

There are three different major credit bureaus are: TransUnion, Equifax, and Experian. Each credit bureau collects financial data from creditors. The data is then scored by FICO or VantageScore.

Once you have a credit rating, it can be released to anyone who has permission to access your report. These include potential employers, lenders, landlords, etc.

The credit bureaus collect slightly different data and use different scoring models, and since creditors are not required to report your data, each one may have slightly different information.

If you have wildly different credit scores from the big three, take time to see why - they should be roughly the same.

There are also other credit bureaus. One credit bureau on this list isCoreLogic Credco. There are more than just 3 credit reporting agencies. However, the major consumer credit bureaus are the big three.

Equifax Vs Experian Vs TransUnion

You are entitled to a free copy of your credit reports once a year. You can view these for free through AnnualCreditReport.com. Remember that you will have different credit scores from each of the credit bureaus, but they should be somewhat similar.

Equifax Credit Reports

• charges for reports ordered through website
• dispute button on website
• will notify the other credit bureau if you notify them of a fraud
• credit freeze fraud alerts available, but must notify all three yourself
• Equifax credit score – 300 – 850

Experian Credit Reports

• charges for reports ordered through website
• dispute button on website
• will notify the other credit bureau if you notify them of a fraud
• credit freeze fraud alerts available, but must notify all three yourself
• Experian credit scores – 300 – 850

TransUnion Credit Reports

• charges for reports ordered through website
• dispute button on website
• paid credit monitoring subscription through TransUnion credit monitoring service
• will notify the other credit bureau if you notify them of a fraud
• credit freeze fraud alerts available, but must notify all three yourself
• TransUnion credit score – 300 – 850

Credit Report Common Questions

Types of Credit Scores: FICO vs VantageScore

Credit reports often use one of two credit scores –FICO scoring model or VantageScore scoring model. FICO is the most common. The credit bureaus create a FICO score based on what is reported to them. This accounts for any difference in FICO scores among credit bureaus.

Your credit score is reported as a three-digit number with the higher the number, the better the score.

VantageScore is an algorithm developed that uses the consumer credit information on file. It is particularly good for people with thin credit history or very young history. VantageScore and FICO use the same score divisions to determine their credit scores: 

• Excellent = 750 and above
• Good = 700-749
• Fair = 650-699
• Poor = 550-649
• Bad = Below 550
  

Good credit scores are those over 670 for FICO. A VantageScore score over 661 is considered good. The score differences come from the different reported data and their different credit scoring models.

The major difference between FICO and non-FICO scores is that each reporting company uses a slightly different model based on each company's preferences. FICO requires a credit history that is at least six months old and with activity within the last six months. Your three credit scores should be roughly the same, with Equifax slightly lower than the others.

Why is Equifax Lower than TransUnion?

The biggest difference between your TransUnion and Equifax credit score is that the TransUnion credit score reports your employment history and personal information. The other two credit reporting agencies or credit bureaus report only the name of your employer. This is the major difference in Equifax's credit scoring model.

Why Are TransUnion and Equifax Scores So Different?

Equifax and TransUnion have different scores because slightly different information is reported to each credit reporting agency. In addition, TransUnion reports your employment history and personal information. Equifax's different credit scoring model results in lower scores.

Why Is My Equifax Score Lower Than TransUnion?

The lower Equifax number is a common concern for many people. The reason that this score is lower than your TransUnion score is based on the fact that TransUnion adds personal information and employment data that is weighted into their model.

The other two only report the name of your employer and do not add any weight to that fact. Both TransUnion and Equifax credit reports are reasonable indicators of your financial responsibility.

Why is My Equifax Score Lower than Others?

Your Equifax score is lower than the other credit scores because there is a slight difference in what is reported to each credit agency and each one uses a slightly different method to score your data. Your Experian, Equifax and TransUnion credit reports should be fairly similiar.

How Do I Know If My Credit Report Is Correct?

Mistakes happen during your credit history, so always check your credit regularly from all three credit reporting agencies. There are several ways to access your credit report from Experian, TransUnion and Equifax. You are legally entitled by federal law to one free copy of your report per agency per year.

For instance, request one agency report in January, one of the second in May, and one from the final in September. This is a fairly simple way to keep an eye on your financial information and your credit history. Many people have discovered identity theft from a sudden drop in their credit report. Access credit reports through AnnualCreditReport.com.

Another way to monitor your credit report regularly is to sign up to free credit score websites, or websites like CreditSesame or Credit Karma. Credit Karma will actually try to help you build your credit score by suggesting credit cards that you could be eligible to sign up for. Credit Karma also updates you with breaches to credit breaches that include any of your information. Since Credit Karma is free, it is a good way to keep an eye on your credit profile and your credit health.

Once you have your credit reports, check them carefully. Look for:

• Correct name
• Correct address
• Correct Employer
• Lines of credit that you have or have not authorized
• Credit cards that you have or have not authorized
• Personal Loans that you have or have not authorized
• Aged out debt issues like bankruptcy (generally 10 years), collections (generally 7 years)
• Aged out judgments based on your state’s statute of limitations 

If you find an error, send COPIES of documentation to the credit bureau along with explanations or the errors. You may have to do it several times and stay on top of them.

If you are denied credit based on your credit score, you can request the reason and a new report. 

If you have had identity theft, you can contact each of the major credit bureaus individually and place a fraud freeze on your credit until you get the issue solved.

How Can I Improve My Credit Score?

If you are not happy with your credit score from Experian, Equifax and TransUnion, you can start to fix it immediately. First, work on paying bills on time. Since 35% of your score is based on your payment history and timely payments, it can be a quick way to improve your score.

Next, use your credit carefully. Credit utilization accounts for 30% of your score. Credit utilization is the ratio of outstanding credit card account balance versus your credit limit.

The lower your utilization ratio, the better. For instance, if you have a $1000 limit and $900 in outstanding balance, your credit utilization is 90%. Pay down your credit card bills. You can also ask for increased credit limits. Just don't use the increased limits!

Credit age makes up 15% of your score. Basically, the longer you have had credit reported to the bureaus, the better. Having old credit – cards held for a long time – is also helpful. Lenders also like to see a variety of credit types.

Credit variety accounts for 10% of your score. And finally, the number of recent inquiries count for 10% of your score. This means you do not want to apply for credit cards just to decrease your purchase costs. Every single time you do that, your credit takes a temporary hit.

The Importance of Good Credit

Your credit report data is very important to your future. Whether you are buying a house or getting auto loans, looking for a new job, or wanting to start on your education, your credit score matters.

There isn't much difference among the three bureaus – Experian, Equifax and TransUnion – but each needs to be monitored for accuracy.

If you have credit card debt that is dragging down your credit score and you are having trouble making even minimum payments, Pacific Debt, Inc may be able to help you get out of debt and learn to live debt free. 

We have helped thousands of people reduce their credit card debt. To find out if we can help you, call one of our debt specialists for a free consultation.

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