THIS PAGE MAY CONTAIN AFFILIATE LINKS. MEANING WE RECEIVE COMMISSIONS FOR PURCHASES MADE THROUGH THOSE LINKS, AT NO COST TO YOU. PLEASE READ OUR DISCLOSURE FOR MORE INFO.
You’ve heard us emphasize, time and again, how important it is to obtain copies of your credit reports from Experian, TransUnion and Equifax annually or before you apply for a major loan.
Fortunately, AnnualCreditReport.com makes it easy to do. You can also get a free copy of your Experian credit report every 181 days from Quizzle.com. But shouldn’t all the information on all three reports be the same? Why do you need to look at all three?
Your credit reports (and your FICO credit scores) may differ significantly amongst the three credit reporting agencies. There are a few reasons this may happen.
Out-of-Date Information On Your Credit Report
One or more of your credit reports could contain information that is out-of-date.
Perhaps accounts that are “paid in full” and now closed are shown “in collections.”
One Credit Report is More Up to Date Than the Others
This is different than having information that is months (or years) out of date. It simply means that the credit reporting agencies update reports at different times of the month.
When I recently pulled all three of my credit reports, I noticed one credit card showing a zero balance (which is true) on my TransUnion report. My Experian and Equifax credit reports both showed the prior month’s balance, which was close to the credit limit on the card. Consequently, my Experian PLUS score and my Equifax FICO score were about 20 points lower than my TransUnion TransRisk score.
There’s nothing you can do about this kind of discrepancy, except to check your report the next month to make sure the information is now accurate and up to date. If it’s not, you now have a reason to file a dispute with the credit reporting bureau.
Clerical Errors and Typos
It’s entirely possible that someone from one of three credit bureaus entered information reported from lenders or credit card companies incorrectly.
This could lead to anything from name or place of employment misspellings to inaccurate late payments being recorded.
This is one of the main reasons it’s important to check all three credit reports at the same time, especially if you plan to apply for a major loan (like a mortgage or car loan).
One common mistake the credit reporting agencies make is to list “soft” credit inquiries incorrectly as “hard” credit inquiries. A hard credit inquiry, which is when your file is pulled with your permission usually so you can obtain new credit, stays on your credit report for up to 2 years and can lower your credit score by as much as 20 points.
If you notice hard inquiries that actually are not, file a dispute with the credit reporting agency in order to raise your credit score quickly.
Your Creditors Don’t Report to All Three Credit Reporting Agencies
This is another common reason for discrepancies in your credit report.
When you make credit card payments, most creditors will report your payments (late or on-time) to all three major credit bureaus. But some only report to one or two of the bureaus. Since the number of accounts you have open, as well as your payment history impacts your credit score substantially, this can mean a big difference in your FICO scores.
If you notice positive information about on-time payments is missing from one or more of your reports, contact the lender or creditor and ask them to report the information to the other credit bureaus.
You can also file a dispute letter with the credit agency that is missing the information; unreported information can be considered an inaccuracy in your credit file.
Why Check All Three Reports?
The answer is simple: When you apply for a loan or line of credit, you never know which credit report lenders will pull. Making sure all the information is accurate and up to date will increase your chance of getting the best interest rates and reduce your risk of being denied credit.