Ever checked your credit scores and noticed a significant discrepancy between TransUnion and Equifax? You’re not alone. This scenario is more common than you might think, leaving many wondering why these scores differ and which one truly matters. Buckle up, because we’re about to dive deep into the world of credit scores and unravel the mystery behind this 100-point enigma.
Why the Discrepancy?
Several factors can contribute to the difference between your TransUnion and Equifax scores:
1. Different Scoring Models: Each credit bureau uses its own proprietary scoring model, which means they might weigh factors like payment history and credit utilization differently This can lead to variations in your scores.
2. Incomplete Information: Credit bureaus don’t always have the same information about you. While some lenders may only report to one or two bureaus, others may do so for all three. This can create discrepancies in your credit reports and scores.
3. Time Lag: Your credit score is a snapshot of your credit history at a specific point in time. If you’ve recently made changes to your credit behavior, it might not be reflected in both scores yet.
Which Score Do Lenders Use?
The answer is… it depends. Lenders can choose to use either your TransUnion or Equifax score, or even both. It might depend on their internal policies, the type of credit you’re applying for, and even your location.
The Bottom Line:
Don’t stress too much about the 100-point difference. It’s crucial to keep in mind that both scores are legitimate and can provide lenders with a clear picture of your creditworthiness, even though they can be confusing.
Here’s what you can do:
- Monitor your credit reports and scores regularly. This will help you identify any errors and track your progress over time.
- Focus on building good credit habits. Pay your bills on time, keep your credit utilization low, and avoid opening too many new accounts.
- Check with the lender you’re applying to. Ask them which credit bureau they use and what factors they consider when making lending decisions.
Additional Resources:
- Credit Karma: Learn more about credit scores, credit reports, and how to improve your credit health.
- The Ascent: Get insights on personal finance, including credit cards, loans, and mortgages.
Remember, your credit score is a journey, not a destination. By understanding the factors that can affect your score and taking steps to improve your credit health, you can set yourself up for financial success.
What’s The Difference Between Equifax And TransUnion?
|
TransUnion VantageScore Model |
|
|
Payment history |
40% |
|
Age and credit mix |
21% |
|
Credit utilization |
20% |
|
Account balances |
11% |
|
New credit |
5% |
|
Available credit |
3% |
|
FICO Scoring Model |
|
|
Payment history |
35% |
|
Account balances |
30% |
|
Length of credit history |
15% |
|
New credit |
10% |
|
Credit mix |
10% |
Why Equifax, Experian, and Transunion Have Different Scores
FAQ
Which is more accurate TransUnion or Equifax?
Do lenders look at TransUnion or Equifax?
Why does TransUnion update faster than Equifax?
Why is TransUnion credit score so much lower?
What is the difference between Equifax & TransUnion credit score?
My Borrowell credit score is 734. As you can see, there’s a large difference between the two scores of Equifax and Transunion. My credit karma score was 821 and my Equifax score was 734. Why is my Equifax score lower than Transunion? That’s like almost 100 point difference between Transunion and Equifax!
Is TransUnion more important than Equifax?
Actually, Transunion is not more important than Equifax You can check your credit scores for free with Borrowell (Equifax) and Credit Karma (Transunion).
Why does my Equifax and TransUnion score vary?
As previously mentioned, Equifax and TransUnion scores may vary as a result of lenders reporting to different credit bureaus. If your lender only reports to Experian and Equifax, your TransUnion score won’t be impacted by this lender.
How can I Check my Equifax & TransUnion credit score?
To check both my Equifax and Transunion scores, I signed up for both Credit Karma and Borrowell. They are a free credit reporting website. To sign up with both these resources, it is free. They make it free to check your credit score by providing recommendations and credit card referrals for commissions..