3 bureaus' credit scores can be widely varied

Tuesday, July 1, 2008

SAN FRANCISCO -- If you're shopping for a loan, it's good to know your credit score. The question is, what score?

Most lenders look at a consumer's credit scores to decide whether to grant a loan and how much to charge. Consumers can buy a report on their credit scores, but these scores vary -- sometimes widely. "There is a pervasive myth that there is one credit score," said Rod Griffin of Experian.

"It's quite possible to get very different numbers that can mean exactly the same thing."

Credit scores are derived by applying a mathematical formula to data in your credit file at each of the three credit bureaus: Equifax, Experian and TransUnion.

Most large creditors provide the same information about you -- such as loan balances and late payments -- to all three bureaus, but some report to only one or two.

The bureaus also collect information about you -- such as bankruptcies, court judgments and tax liens -- from public records. But their collection efforts are not exactly the same.

For these reasons, your credit report -- and thus your score -- can be different at each bureau.

Even if your three credit files were identical, your score could vary depending on the formula.

Source: http://detnews.com/