- January 31, 2017
- Posted by: checkadvance
- Category: Finance & accounting
If you examine your credit scores from several places in Chattanooga such as Check Advance Overdraft Service, your bank or straight from the bureaus, you may have discovered that your score differs greatly. In fact, that’s a quite common thing. Receiving different scores can naturally arouse some distraction, especially if you have actually verified there are no mistakes on your reports.
So if you are not mistaking, why wouldn’t your scores coincide? There could be lots of factors and here are three main of them.
1. Your scores can differ by bureau.
There is a couple of reasons that your rating can differ from bureau to bureau. Typically, institutions take your credit information from the three biggest bureaus – Equifax, Experian and TransUnion. However, lenders do not constantly report to all of them. It’s possible that a person or your loan providers do not apply to all 3 credit bureaus.
Moreover, bureaus can update scores at various times. Credit scores can alter quite often. A credit rating is determined when a credit report is asked by you or a loan provider. Your rating might change when your loan providers report brand-new details to the bureaus. Given that a rating is based upon constantly upgrading credit files, it might differ gradually. Lenders usually report brand-new details to the bureaus as soon as a month. So, if you have several loan providers, it’s possible that the bureaus are getting brand-new info about various accounts at different times during a month. For instance, your home mortgage loan provider might report your payment status to the bureau on the very first of the month, while your credit card company may provide the information in the end of a month.
2. Your scores can be affected by the scoring model.
The most common scoring models are FICO and VantageScore. The FICO scoring model is believed to be the most reliable because it has the best track record. It was created in 1989 and there have been many changes over the last 27 years about what to take into account to provide you with an accurate credit score.
That’s why FICO has 49 different variants that it sends to lenders. It may change by a few or many points, depending on what company asks and what was important to that company in calculating your score.
Thus, if you want to get a department store loan it might be slightly better (or worse) than for an auto loan. And that will be slightly different from your score for insurance.
3. Your scores can vary depending on what type of credit you are applying for.
As we have mentioned above, if you’re looking for a mortgage, the credit history calculated for that would likely be different compared to the credit report you would certainly see if you were making an application for a car loan.
Lenders are able to draw your scores depending on the information from a number of the debt bureaus either 1 or 3 as they want. You’ll hardly comprehend if they’re using simply one rating or a mix of 2 or even more of your scores, which scoring model they are using or if they have their own formula that they developed themselves.
Even though this whole system may be confusing, the scoring models have some benefits – they make the whole process quick, accurate and fair. Now, when you know the main reasons that may change you credit score, don’t forget to check this 3-digit number that is supposed to reflect your likelihood to repay your debts.