Business & Finance Personal Finance

Why a 50-Point Difference in My Credit Scores?

    Scoring Models

    • Each credit bureau uses a different scoring model to calculate credit scores. This means your Equifax score could be 700 when your Experian score is only 650. Pat Curry of Bankrate explains that Equifax uses the BEACON scoring model, TransUnion uses the EMPIRICA score, and Experian uses the Experian/Fair Isaac Risk Model. The scores calculated using these models will likely differ from your FICO score, which is what most lenders use to determine creditworthiness. The Fair Isaac Corporation calculates a FICO credit score by using information about your payment history, how much money you owe lenders, how much new credit you have applied for or received, the types of credit you use and the length of your credit history.

    Reported Data

    • Lenders do not have to report your credit activity to all the credit bureaus, so the information used to calculate each of your scores may differ from one bureau to the next. If you have a bank loan in good standing, but the bank only reports to Experian, your Experian score could be 50 points higher than your TransUnion and Equifax scores. If you miss a credit card payment, but your credit card company only reports to Equifax, your Equifax score could be 50 points lower than your other scores.


    • Credit bureaus do not verify the accuracy of information reported by creditors, so any incorrect negative information on your reports could reduce your score by 50 points or more. In the United States, consumers are entitled to one free credit report per year from each of the three major credit bureaus by going through When you receive your reports, check for errors that might be affecting your score. One example of a credit report error is if a creditor reports your loan payment as late when it was paid on time. If you discover errors, you have the right to dispute the information by sending a dispute letter to the credit bureau.


    • Lenders check your credit score to determine your eligibility for car loans, mortgages, credit cards, personal loans and other credit accounts. Someone with a low credit score is a greater risk to a lender than someone with a high credit score. As a result, lenders charge higher interest rates and fees to those with low credit scores. Lenders also can deny credit applications based on low scores. Just one late payment can lower one of your scores enough to result in thousands of dollars in fees and additional interest.

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