You may have heard of the three main types of credit scores: TransUnion, Equifax, and Experian. These three companies each have their own credit scoring models so it's important you know how they calculate your credit score. The three main models, which are based off your credit history, are more inclusive to infrequent and new users. You will likely have difficulty getting credit approval if you have Very Poor Credit.
TransUnion
TransUnion scores and other credit scores are intended to give lenders a snapshot on a consumer’s creditworthiness. The scores are available for free and can be used by lenders to aid in making lending decisions. They can however vary greatly from lender-to-lender. Lenders may use the same scoring system but they might view an applicant differently depending upon how their scores were calculated.
TransUnion scores range between 300 and 850, with 300 being the lowest. Equifax scores can range from 280 to 855. Both bureaus are more concerned with the average age credit accounts and payment history. FICO is more comprehensive. It is based upon a person’s overall financial situation as well as credit history.
Equifax, TransUnion, or Experian are the main credit bureaus in the United States. They all use different models to compute the scores, and the scores can differ from one another. This is one of the reasons why you should pull your credit report at all three agencies.
Experian
Although the Experian types range from 0-549 credit scores, they aren't set in stone. They fluctuate over time depending on your financial behavior. Credit scores are calculated by statistical algorithms. Each bureau's method of calculating credit scores is unique. You should consult your credit report with the bureau to determine your exact score.
There are many options to increase your score. Credit score builders are available to help you improve your credit score. Experian Boost, for example, can be signed up. This tool can boost your credit score by 13 percent. This service isn't available to everyone. It is only for those who pay their bills using an eligible account.
Always check your credit score at all three credit bureaus. Scores from each bureau can vary by roughly 50 points. TransUnion and Experian use different formulas to calculate scores.
Equifax
The Equifax is a type of credit score that lenders use to determine your eligibility for a loan. Your credit history, including the number of credit card accounts you have and how they are paid off, as well as the length of those credit cards. It is important to remember that your score could change over time. To determine if you are eligible for a loan, it is important to compare your score with the one from the same period in the past.
Equifax is a major financial bureau and maintains a large number of consumer credit scores. But there is a problem. The company made a serious error in the codification of some credit scores. This error was not noticed by many people, but affected millions.