Why's My FICO Score Wacky?

Hi, Dayana! I have a crazy FICO score question for you that I cannot find the answer to anywhere else. I recently requested my credit report and FICO scores from TransUnion and Experian. The report data is identical on both -- but one gave me a FICO of 678 while the other was 754! That's a huge difference, and I'm wondering what's the cause, and which is accurate -- and, more importantly, whether there is anything I can do to get lenders to look at the higher one. Thanks a lot, D.

Wonder why your credit scores are so wildly different? It's because they are wildly different. I had a similar experience to yours recently while buying a home. My Equifax score was 30 points higher than my TransUnion score. Here's why:

Each credit reporting agency uses a different scoring system. "FICO" has become the "Kleenex" of credit scores. The word is often used as if it were a generic term for "credit score." But "FICO," a term based on the name of the company -- Fair Isaac Corp. (NYSE: FIC  ) -- that developed the scoring model, refers to that brand and that specific product. Its consumer arm -- -- sells FICO scores based on the information from each of the three major credit reporting agencies. The only credit reporting agency that sells the FICO-brand score to consumers is Equifax (NYSE: EFX  ) . The other two major credit reporting agencies -- TransUnion, and Experian -- each sell a consumer score based on credit risk formulas they developed internally. (They all partnered with Fair Isaac to develop risk assesment scores for business clients, however.) Depending on the mood of the marketing copywriters, you may find the scores being given various names. Not only that, but the grading scale is different from agency to agency. Oh, and that non-FICO credit score? It's not the same score your lender uses to make his or her business decisions, although it's a fair indicator of how you'll be judged.

  • When you shop at TransUnion, you're offered a Personal Credit Score ranging from 300 to 850. The company sells its business clients a Classic FICO Risk Score (formerly known as an EMPIRICA score).
  • Experian's consumer score is based on its own PLUS Score system with scores ranging from 330 to 830. It's business-to-business score is called the less-catchy Experian/Fair Isaac Risk Model.
  • At Equifax you can buy your FICO score (scale 300 to 850), the same score (called a BEACON score) of which is sold to businesses.

Different calculations, same general method of judging you. Here's a great post from our Consumer Credit/Credit Cards discussion board on how those numbers translate into real-life dollars, cents, and lending decisions.

The information on each of your reports is not really identical. Lenders are not required to report your credit activity to any of the credit reporting bureaus, let alone all three. Some may report your credit limit and the most up-to-date activity to one and not the other. One may have only begun reporting its business relationship with you recently, while letting another bureau in on your ties since the account's inception. Even the smallest discrepancy can have an impact on your score. So take a magnifying glass to your reports. And if there are any inaccuracies, start clearing them up.

The spread between your credit scores is quite large, so you should probably hunker down over the reports to see whether they are truly identical. Some of the most surprising things can cause your credit score to take a temporary dive. It's good to catch them now. Then again, if some little white lies are boosting your credit score, I won't tell if you won't.

Is it that time of month? Another factor that can affect your score is when in the credit cycle your score is calculated. Say you use your credit card for all purchases to earn miles, cash back, or free kittens. You pay off your bill in full, every month. But the credit scoring model doesn't know that. It only knows what your credit usage looks like at the very moment you ask it to check. If you just paid your bill and your credit card balance is very low, then your "debt to available credit" ratio is going to be low, too, thus giving your score a boost. But if it's not yet bill-paying day and you have a large balance on the card, that information inputted into the formula makes it appear that you have a higher ratio of debt to available credit.

As for directing a lender to look at one score and not the other... that's like trying to get a Pepsi instead of a Coke at McDonald's (NYSE: MCD  ) . Lenders set up a business relationship with one (or all three) of the credit reporting bureaus, or even one of the hundreds of smaller ones out there that make a buck by tracking your every money move. If you are talking to a human being (as I was during the mortgage preapproval process), you can ask which credit reporting agency your lender does business with. It's purely informational, but at least you'll know what's coming.

Has it been a while since you've looked at your credit score? Here are four ways to get your full file:

1. For free! If you live in a part of the country that is now FACTA-enabled, you've got three free credit reports due to you. Here's how to get them.

2. Via financial/personal tragedy. Been denied credit? Unemployed? No, we're not going to try to sell you a credit repair program. But you are eligible for a free report if you've gotten a "no" from anyone, based on your credit score. (See the sidebar on this story.)

3. Courtesy of a few on-the-ball politicians. Residents of Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont already get one free annual report, thanks to savvy state legislators.

4. For pay. Sometimes it does pay to take a peek at your credit file. (Here are a few examples.) Fool Credit Center sponsor TrueCredit offers readers a single report with data from the three major credit reporting agencies, as well as one free credit score, for $29.95.

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  • Report this Comment On March 24, 2011, at 2:39 PM, prginww wrote:

    Curious: call transunion and you find you are speaking with someone in india who thinks an account with a brokerage firm means you work for them. Experian and Equifax (more flaky) are in the US and understand these details.

    Most car loans or rentals use transunion which is almost always lower and more inaccurate (and no amount of writing letters changes this) and what a surprise!!!! car loans and rentals and others use the lower transunion scores and not the experian nor equifax.

    All have vested interest in lower scores as banks, anyone giving loans and rental corporations get paid more if your transunion score is lower.

    Its all a scam. You zip code can raise or lower your score, your past is not important. You can have 35 years of perfection, and suddenly....a problem, and 1 year of "issues" that destroys the past and your perfection to that point.

    And none ask for income nor savings, nor gold value you may have stored in the bahammas or bermuda or under your back yard.

    All these scores are like insurance tables, all based on nonsense statistical factors. Use your credit card in the wrong place and your score drops.

    But transunion is the main offender. And you can write them until hell freezes over with a lawyer and there is no change to inaccurate information.

    Esperian is the best. Equifax bounces back and forth between the two.

    This is no way to run credit and is ridiculous


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