Why Are My Credit Scores So Different?
Laura Adams, MBA
Jeff L. asks:
“I was recently denied a credit card because the company said I had a score of 634, which they claimed was too low. I recently paid $30 to get all 3 credit scores. They were: Experian – 696, Trans Union – 700, and Equifax – 661. I know there will be some difference between the agencies, but I am at a loss to explain the differences between what I paid for and what the credit card company said I had. How can the scores be so different? As a side note, it was worthwhile to pull the reports because some items I had paid off were still not listed as paid.”
Your credit score is a mathematical formula that’s meant to be an estimate of how likely you are to pay your debts. The reason Jeff received different scores from each of the 3 credit agencies is due to several factors.
Since he found errors on some or all of the reports, that could cause major discrepancies between his scores. Your score is only as good as the information in your credit file, so getting errors corrected should be a priority because it will probably boost your credit score.
Remember that you can pull your credit history for free once a year at annualcreditreport.com. The free credit report doesn’t include your credit score, but that’s not necessary to double check your report and to clear up any incorrect data.
But even if all your information with the 3 credit agencies matches exactly, there will still be differences in your scores. That’s because each of the agencies use a different proprietary scoring model.
Additionally, your credit score with each of the agencies changes from day to day as your account balances change or your payments to merchants are reported. The credit bureaus don’t operate on the same schedule when it comes to updating your credit file or recalculating your credit score.
Jeff should get the errors on his report cleared up first, and then apply for the credit card he wants.
Laura Adams is the award-winning author of Money Girl’s Smart Moves to Grow Rich. Get the paperback or ebook on Amazon.com!
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Good Credit Bad Credit Switch image courtesy of Shutterstock
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.