Why even consumers with damaged credit as they prepare to apply for an auto loan might notice that their FICO scores are not the same from the different credit reporting agencies
We continue to be surprised by the fact that quite a few borrowers with damaged credit still don’t understand why the credit scores used by car dealers often aren’t the same as the one they think they have.
But here at Auto Credit Express we understand why this happens because we’ve spent more than twenty years matching car buyers with problem credit that have been searching for online car loans to those dealers that can offer them their best chances for car loan approvals.
Having said that, today we’re going see why all consumers – from those with bad credit to those with excellent FICO scores – will typically receive a different credit score from each credit bureau.
Why credit scores differ
But instead of taking our word for it, we thought it would be even better if we went straight to the source. In this case that source turns out to be FICO (originally known as Fair, Isaac and Company), the agency responsible for the development of the FICO score.
In an article that appeared on their website not too long ago, 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.”
That might sound confusing but just hang in there because it does get easier to understand.
To begin with, examples of the “data differences” that Ms. Gasking referred to include:
• A tradeline (one of your credit accounts) may be reported to one or two credit reporting agencies and not to the others
• Reported delinquency status (such as current, 30, 60 or 90 days delinquent) may differ among the credit reporting agencies
• Outstanding balance (how much is owed) on a tradeline may differ between the bureaus
As far as what causes the discrepancies, this can result from:
• Credit grantors reporting information to all three bureaus, but at different times
• Credit grantors reporting borrower information to one or two of the bureaus, but not all three
Adding to the dilemma, Ms. Gasking also pointed out that the credit bureaus don’t always handle their data in the same way: “one CRA (Credit Reporting Agency – the same as a credit bureau) has a policy to not display authorized user tradelines with negative information on their reports; the other two bureaus do.”
Note: authorized users are entitled to use the credit extended on an account (if they have a card or know the account information – many do not) but have no legal responsibility to pay the bill.
As we see it
Consumers, especially those who are credit-challenged, should be familiar with why their credit scores will probably not be the same at each of the credit bureaus/credit reporting agencies. But at the same time it’s important that they know at least one of them.
Something else that could make a difference: we’d like borrowers that have experienced car credit problems in the past to know that Auto Credit Express can match them with dealers for their best opportunities at approved car loans.
So if you’re ready to establish your auto credit, you can begin now by filling out our online car loan application.