Why Credit Scores are Differentby Steve Cypher on Friday, August 17th, 2012
Credit-challenged car buyers often don’t understand why their credit scores can change from bureau to bureau.
Here at Auto Credit Express we’ve been asked this question more times than we can count. That’s because we’ve spent the past two decades helping car buyers with less than perfect credit find dealers that can arrange financing for them.
So today, rather than boring you with our own explanation, we’re going right to the source to explain why consumers with poor credit, as well as nearly everyone else, have different credit scores at each of the credit bureaus.
We initially considered discussing the topic based on our own experiences, thinking this would be the best way to go. But rather than do that, and after reading a blog post, we decided it would be an even better idea to go straight to the source. In this case that happens to be FICO, the developer of the FICO score.
In a recent article that appeared on their website, Joanne Gasking, product management director for Scores at FICO, had this to say, “If there is a score difference across bureaus for a given consumer, then that score difference is 85-90% driven by data differences in the underlying credit.”
If that sounds confusing, just bear with us, because it does become easier to understand. Examples of these “data differences” that Ms. Gasking gave include:
• A tradeline (one of your credit accounts) may be reported to one bureau and not another
• Reported delinquency status may differ between bureaus
• Outstanding balance on a tradeline may differ between bureaus
These issues can be caused by:
• Lenders reporting information to all three bureaus, but at different times
• Lenders reporting to one or two of the bureaus, but not all three
In addition, Ms. Gasking also points out that the credit bureaus don’t always handle their data in the same ways. She then goes on to explain what this means: “one CRA (Credit Reporting Agency – more commonly known as a credit bureau) has a policy to not display authorized user tradelines with negative information on their reports; the other two bureaus do.”
As we see it
Especially if you have bad credit, you should know at least one of your credit scores. It’s also important for you to understand why your FICO score is not the same at each of the credit bureaus.
Another important thing to remember is that whether your car credit is good or not that great, Auto Credit Express can help you find a dealer for your best chance at a car loan approval.
So if it’s time to get your auto credit on track, you can begin the process now by filling out our online auto loans application.