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Why Do Credit Scores Vary Amongst Credit Bureaus?

One of the main criticisms of credit scoring is the extreme variation between credit scores. Studies have shown scores to vary as much as 100 points between credit bureaus.

There are several reasons for this. The first reason is not all creditors report their information to all three credit bureaus, and if they do, they may not report the same information at the same time to each agency. For instance, let’s say you have a credit card that you have had for the past 10 years and never missed one payment (a positive account). If the credit card company only reports the account to Equifax and Experian, your TransUnion credit score could be disparately low.

The second reason is each credit bureau or reseller uses its own customized version of the FICO credit scoring model. Because each credit reporting agency uses a FICO model developed specifically for that agency and its data, the credit scores it generates will differ.

The third reason is each credit bureau has its own way of assigning reported information to a given person. This is necessary because lenders are not always able to provide full social security numbers or complete account details. Also, people may have accounts under different names because of marriage or variations in their name or different addresses. The proper information does not always completely follow the individual.


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