The Three Major Credit Bureaus
The three major U.S. credit bureaus are:
Each credit bureau maintains a credit record for every person in the U.S. who has ever had a credit account or loan, provided that the creditor reported the data to all three companies. Some lenders report credit data to only one agency. Some lenders may report to two or all agencies. The determining factor is whether the lender has a subscription with all, or just one or two of the credit bureaus.
This may seem confusing, but larger creditors, such as mortgage companies and car loan providers, usually report to all three agencies. Smaller creditors may report only to one or two.
Three Different Scores?
One person may have three different credit scores as each agency may have different information about them. Consumers have been known to have two good credit scores and one poor score. In cases such as this, the credit bureau reporting the poor score likely has an errant entry on the credit report.
More often, there may be some variation between the three scores, but they are usually very close.
FICO versus Other Scores
If you are comparing credit scores between the three agencies, make sure that you are comparing the same score. All three agencies provide the standard FICO score. Each credit agency will sell the actual FICO score to consumers for a small fee. Also, the true FICO score is often included in some of
the credit monitoring plans offered by the agencies. However, each credit bureau uses other scores, too. These other credit scores are similar to the true FICO score, but are calculated using formulas that differ from the FICO formula.
All three credit reporting companies joined forces to create a score to compete with the FICO score. The Vantage Score is an alternative to FICO. The Vantage Score was created to better evaluate consumers with a sparse credit history. However, widespread use has not caught on for the score. Only about 10 percent of all lenders use this score compared to 90 percent who use the FICO.
Some credit bureaus will provide consumers with the Vantage Score with their credit monitoring plans.
Another alternate credit score is the PLUS score. This score was created by Experian. Though similar to the FICO score, the PLUS score “models” the information in your Experian credit report.
In most cases, when an individual refers to their three credit scores, they are likely talking about their FICO scores from each of the three agencies. However, consumers also may be referring to the Vantage Score, PLUS score or another score used by the credit bureau or lender. Regardless of the credit scores you monitor, you should develop a strategy for keeping tabs on your score. Good credit will save you money on future interest charges, insurance premiums and more.