Why Are There Three Credit Scores?

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.