The 1 Thing Most People Get Wrong About Their Credit Score

published Apr 24, 2019
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“You only have one credit score.” True or false? Surprisingly, false! You actually have many: You get a different credit score—and report—from each bureau. Thinking you only have one is a common misconception that can actually end up costing you thousands of dollars in interest and fees when it comes to apply for a home loan if your credit score is lower than you thought.

If you think of your credit score as your financial GPA, it helps to understand who is grading you. While there are several credit bureaus out there, three of them—Experian, Equifax and TransUnion—have emerged as the major players.

Understanding how these bureaus work is important because they are the companies that are keeping tabs on your borrowing behavior, scoring you, and selling your information to lenders that in turn decide if you’re creditworthy enough for a home loan or to rent an apartment.

Here’s what you need to know about the three bureaus and how they differ from one another:

What are credit bureaus?

The three major credit bureaus, also referred to as credit reporting agencies (CRAs), are very similar, explains Freddie Huynh, vice president of credit risk analytics with Freedom Financial Network, a debt management company.

“Their core function is to compile the credit histories of consumers from the information that lenders report to them,” Huynh says.

Nowadays, the information tends to be similar across the three bureaus because the information is reported in a standardized format and the majority of lenders report to all three credit bureaus, Huynh explains.

While similar, the three major credit bureaus are completely separate companies that are competing for the business of lenders and creditors, explains Oliver Browne, credit industry analyst with Credit Card Insider, a credit card comparison and education site.

“The bureaus act as credit information brokers for banks, credit card companies, and other creditors,” Browne says. “Creditors buy and use this information, in the ways of credit reports and scores, to help them make decisions regarding lending and credit.”

They also pull publicly recorded information to add into your report, which could include actions like bankruptcies, foreclosures, or judgments.

The three credit bureaus: Experian, Equifax, and TransUnion

More than 400 some credit consumer reporting agencies exist in the United States, according to the Consumer Financial Protection Bureau (CFPB). But, combined, the three major credit bureaus issue more than three billion consumer reports every year and maintain credit files on more than 200 million Americans.


This company’s history traces back to 1803 when London tailors began swapping information about customers who didn’t pay their debts. The Society of Guardians for the Protection of Tradesmen against Swindlers, Sharpers and other Fraudulent Persons had a monthly circular that included information on people who failed to pay up. Scandalous, right? Experian evolved, expanding to the United States and more than 80 other countries. In March 2019, the company began offering “Experian Boost,” which allows consumers to give read-only access to their bank accounts so they can build their credit by making regular utility payments.


Originally known as the “Retail Credit Company,” Equifax was founded in Atlanta by brothers Cator and Guy Woolford in 1899. It expanded with branches throughout the United States by 1920, a time when “car loans” became a popular way for families to afford Henry Ford’s Model T cars. In 2017, an Equifax security breach exposed sensitive, personal data belonging to 143 million Americans.


TransUnion began as a parent holding company for a railcar leasing corporation in 1968, and then expanded into the credit industry a year later.

In addition to these well-known bureaus, there are dozens of other services collecting and selling your information. You can find a good overview of them through the CFPB. But, for example, CoreLogic Credco collects information about tax payment information and child support payments among other data. ChexSystems gathers information on open and closed banking accounts, and many banks will reference the system before allowing you to open an account.

How to contact the credit bureaus:

Experian: 888-397-3742

Equifax: 866-349-5191

TransUnion: 800-916-8800

How to get your free credit report

Thanks to the Fair Credit Reporting Act, you’re entitled to a free credit report each year from all three major credit reporting agencies. You can instantly access your free reports online at Or, you can call 1-877-322-8228 to request your report be mailed to you.

Another option is by downloading the request form and mailing it to:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

Your credit report doesn’t contain your credit scores; rather, it’s a comprehensive look at your borrowing history and on-time payment history.

Because you don’t have to order reports from all three bureaus at once, you could spread out your requests for the reports throughout the year. Also, you may be able to purchase comparable three-in-one reports from for-profit companies.

Why your scores might differ

You may notice that your scores vary across the bureaus.

Some lenders prefer working with one CRA more than others, explains Todd Christensen, an Accredited Financial Counselor and education manager for Money Fit, a non-profit debt relief organization. Lenders may choose CRAs based on contract fees, customer service, or simply the personal preferences of their executives, explains Christensen.

“That means that information on one of your credit reports may not be on the other two,” he explains. “Having different information on your report means the resulting score will differ because it is using different information.”

Even if all information were the same across all three credit bureaus (which is uncommon), he explains, each bureau has its own version of a FICO score, so your rating will still differ.

“Again, this is because each CRA believes it has a better way of predicting future risk to lenders using their own models,” he says.

When applying for a loan, such as a mortgage, rather than taking the average, many lenders will disregard the top score and the bottom score, basing their decisions on the middle score, Christensen says.

Bottom line: Since your credit reports could be different, it’s important to review your reports for errors from all three bureaus, says Mike Pearson, a personal finance expert and founder of Credit Takeoff, a research-driven personal finance site for people looking to improve their credit.

The takeaway here? There’s a lot of eyes on your credit, and monitoring and analyzing creditworthiness is a big business.

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