Credit Scores

When you are looking for your free annual credit report from the three major credit bureaus, it makes sense to ask, "When does the credit bureau update my report?" After all, you may want to time your annual request for your free credit report at the time when you will get the most up-to-date information.

The fact is, there is no set date upon which the credit bureaus update your credit report. Your creditors, who are responsible for sending information to the credit bureaus, send on a rolling basis throughout the year, when information becomes available. If you are late on a payment, for example, that information will be reported shortly after it happens, and your score will be adjusted accordingly. How quickly the information is reported and the effect it has, depends on how late you are and how fast the creditor decides to give the information to the credit bureaus, or if they do choose to report it at all. For example, some creditors will not report a late payment until you are over 30, 60 or 90 days late.

An annual review of your credit report is a good idea, and will alert you to any major changes, such as old items falling off, or any new items that may have been added. If you are worried about identity theft or if you are rebuilding your credit and applying for a major loan (i.e. a mortgage loan) you might want to keep a close eye on your credit. In that case, you might want to consider subscribing to a credit monitoring service, which not only alerts you to any changes in your credit report, but will allow you to access your credit score.

It's important to be an informed credit consumer and know the information in your credit report. An annual check will allow you to stay on top of your credit standing, and help prevent identity theft.

Generally, when people talk about your credit score, they mean your FICO score, developed by Fair Isaac to be a three-digit representation of the information in your credit report. Using this score, lenders will determine the likelihood of your default on a loan, and whether you will make timely payments if they lend you money.

In reality, however, there are actually three different credit scores on your record, one for each of the three consumer credit bureaus: Equifax, Experian and Transunion. Since each of the three credit bureaus collects and reports information independently, they may give you scores that differ, sometimes widely. Different credit bureaus may have different information on file, and they may also use different models to calculate your score. But generally, the FICO score developed by Fair Isaac is the standard by which the credit bureaus operate.

There are almost always minor differences in your scores across all three agencies, depending on a variety of factors. If you see a significant variation in the score, there may be a reason such as:

• You may have applied for credit under a different name, such as your maiden name. That might cause some of the credit bureaus to have incomplete information.
• One or more of the credit bureaus has incomplete information. Since lenders, collection agencies and court records are reporting this information themselves, some of them might not have reported to all three agencies.
• One agency may have more recent information than another, since lenders report information to the credit bureaus at different times.
• Credit agencies may not record the same information in the same way.

So which score is your credit score? While it is tempting to go with the highest of the three as your 'official' credit score, sadly, that is not the way lenders look at it. Lenders will tend to average out the three scores, or go with the lowest. So be sure you know what lenders are looking at before you apply for a loan.

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