We all know there are differences in credit scores because of different scoring models (i.e. FICO, Vantage or other proprietary credit scores). Credit scores will also vary depending on the permissible purpose behind your accessing a credit report. For example, when a consumer applies for a credit card, the credit score delivered is different than the credit score that would be delivered when processing a mortgage application. But why do FICO scores vary on a mortgage credit report across each of the 3 credit bureaus? They should all be the same if all three bureaus (Equifax, Experian and TransUnion) are using the same scoring model, right? Wrong.
Credit Data Varies at Each Credit Repository
There are several reasons why mortgage FICO scores will vary when your credit is pulled by a lender. The most obvious is that not all bureaus are reporting the same information. Creditors are not required to report to the bureaus. It is their prerogative. Some creditors may report to only one or two bureaus and not the third. If they do report to all three bureaus they could even report different information to each bureau. They may accidentally report a late payment to one bureau and not the other two. There are several collection agencies that will report to only one bureau, which can result in having one score as much as 100 points lower then the other two.
Timing of Bureau Reporting
Creditors might not report information to the bureaus at the same time, which could result in different information in the file and, therefore, different scores. For example a creditor may report to Equifax at the beginning of the month, TransUnion in the middle of the month and Experian at the end of the month. Depending on when the credit is pulled there could be 3 completely different sets of information for the same creditor.
Each Credit Bureau Utilizes Uses a Slightly Different Scorecard
While all three bureaus use the same FICO scoring model there are minor variations between them. Each bureau scoring model was developed separately so even though they are based on the same FICO scoring model, they are not exactly the same since they are based on Score Factors (also known as Reason Codes). There are 30-40 different Score Factors that could affect your credit score. Each of these Score Factors carries a different point valuation, which can also vary by bureau. For example the score factor “too many revolving balances” could carry a weight of 10 points with one bureau but 13 with a different bureau. Your score will usually be based on 4 Score Factors and as many as 5 if inquires have affected the score. Even the wording of the Score Factor can vary per bureau, which can affect your FICO score. Because of these variances even if all three bureaus had the exact same information the FICO scores could still be different. As if the world of credit scoring was not confusing enough, this may make it more frustrating. In a perfect world, creditors would report to all three bureaus at the same time of the month and all three bureaus would use the same Score Factors. But until this happens, you can stay ahead of the confusion by arming yourself with as much information as possible about how the scoring system works.