Why Do I Have Different Credit Scores?

Why Do I Have Different Credit Scores?

by | Mar 9, 2023

Have you ever wondered why you have different credit scores from all three major credit bureaus? Let us help explain.

The information that gets reported to each credit bureau can be different. And your credit scores might be calculated by different scoring models. So how do you know which credit score to follow? Or which score is more important? Read on for more information.

Why Do I Have Multiple Credit Scores?

 As we all know, credit scores are based on the information in your credit reports. But why do you have multiple credit scores?

To put it simply, different credit scoring models are used to calculate your scores. Plus, major credit bureaus, such as Experian®, Transunion®, and Equifax®, may not receive all the same information about your credit simultaneously.

Furthermore, not all lenders and creditors report to the credit bureaus or report to only certain bureaus, which can be a factor in seeing different scores.

Lastly, if there are inaccuracies in a credit report from a credit bureau, that also can be why you see different scores. That’s why it’s important to contact the credit bureau if you notice inaccuracies in your report because it can impact your credit.

Which Credit Score Is More Important?

As every individual has multiple credit scores, it is impossible to say that one is more important than the other.

Instead of focusing on just one score, looking at the range in which your credit scores fall can help you determine what loan or other line of credit you might qualify for and at what rate.

It is also important to note that 90% of lenders use FICO® Scores in most lending decisions, according to Fair Isaac Corporation. FICO® Scores range between 300 and 850 and are commonly used to decide whether to give credit on an auto loan, credit card, and mortgage.

How Can I Help My Credit Scores?

Improving your credit scores can be straightforward. For example, if you tend to pay bills late, you need to focus on paying your bills early or on time over a long period. Monitoring your credit scores to see if there are any significant changes can also help you discover what’s happening in your credit reports. Here are some methods to help your credit score:

Strategize Your Credit Utilization

Credit utilization is part of your credit limit at a specific time. If you are trying to raise your credit score, using less than 30% of your credit card limit is advisable.

The lower, the better. An excellent way to help your credit is to pay back your balance before the end of the billing cycle.

Request a Higher Credit Limit

Usually, having a long period of on-time bill payments or a raise in income can increase your chances of getting a higher credit limit. Your credit utilization increases if you have an increased limit while still having the same balance. This helps to improve your credit.

Fast Payment of Bills

Late payment on bills do the exact opposite of helping you achieve your credit score goals. Late payment records tend to stay on your credit report for long periods.

If you pay bills late, creditors can report the missed payment to the major credit bureaus. Likewise, paying bills on time helps raise your credit scores.

Add Rent Payment to Your Credit Report

Consider reporting your rent payment to major credit bureaus. When on-time rent payments are reported, this can be valuable when building your credit scores.

Bottom Line on Different Credit Scores

Everyone has more than one credit score. While there’s no exact answer to which credit score you should pay attention to, ensuring they all fall in a good score range is important. To help build your credit scores, consider paying bills early or on time and monitoring your credit scores for changes.

If you need help staying on top of your credit or want to get your FICO® Scores, sign up for MyScoreIQ. This service is dedicated to helping you reach your credit score goals.

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*Source: Fair Isaac Corporation.

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