Given the popularity of the question, we thought we’d explore the topic a little further. One of those most common questions we heard was why your credit score might be different depending on which bureau’s report you check. Since each credit bureau looks at factors slightly different, working on one element may increase your score by 10 with on credit bureau, but only 8 with another. Yes, but the increase may be different among the credit bureaus, depending on what factor you used to increase your credit score. If I improve my credit score, will this be reflected with each credit bureau? Knowing what credit bureau the lender refers to can help you in making financial decisions regarding your credit score. Some lenders look at all three major credit bureaus, while others only look at one. No, however, depending on what you are wishing to increase your credit score for, it is a good idea to speak with the bank or lender to see what credit bureau they use for their calculations. Do not be alarmed at a slight difference, it is when there are large differences that requesting your credit report may show why the discrepancy exists. So while one may weigh an element at 30 percent, another may rate it at 35 percent, which will result in a minor difference in your credit score.
Another possible reason is that each credit bureau factors certain elements slightly different. Some lenders only report to one credit bureau and the credit bureaus do not interact with each other regarding accounts and payment due dates. There are a variety of reasons why this may occur. You may see a slight difference between the three main credit bureaus, but do not be alarmed. User questions: understanding credit bureaus Here’s what they asked - and how we answered.
We polled some of our Credit Sesame members to find out what questions they have about credit bureaus. →Information that gets shared among the bureaus →Information collected or bought by the bureaus →Information reported to the bureaus by creditors The data that the bureaus collect can come from a number of different sources: How do credit bureaus get your information? As a consumer, credit bureaus are federally mandated to provide a copy of your credit report at no cost once per year. These reports can be used by lenders when considering whether or not to extend credit to you. They may also use this information to calculate your credit score. What does a credit bureau do?Ī credit bureau uses the info gathered on you to build and generate your credit report. Given the importance of your credit score and how it impacts your everyday life, any chance to improve your credit score should be welcome. So how do credit bureaus work, where they get your information, and how should you go about handling any inaccuracies you may find on your report. While the bureaus are often lumped together, they are actually separate companies competing for the same business from consumers. Learning about how credit bureaus work can actually help you better understand your overall credit. Why is knowing about credit bureaus important? As a result, it’s important to know the differences, as well as how your credit reports can vary from bureau to bureau. Or, perhaps the credit bureaus use different scoring models with different credit score scales - which can also affect your credit score and the range in which it falls. And while most of the information gathered by the bureaus is similar, there are some differences to note.įor instance, one bureau may have information that is not collected by the other two - which can affect all three of your credit scores. In the United States, there are three major credit bureaus - Equifax, Experian, and TransUnion - that are competing against each other to capture, update, and store the credit histories of most US consumers. You’ve likely heard of the major credit bureaus, but do you know what the difference is and what these bureaus really do? Introduction
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