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Ask the Expert: Why Are My 3 Credit Reports Different?

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We asked our Facebook fans and Twitter followers to share their most pressing personal finance questions. Now, John Ulzheimer, credit expert for Credit Sesame, weighs-in.

Q: Why are my three credit reports different?

I recently received the following question from a consumer via Facebook.

“John, I followed your year end advice and I pulled my three credit reports from annualcreditreport.com.  The problem is I’m more confused now than before I did that. My credit reports are from Experian, Equifax and TransUnion.  They’re totally different!  Some of the credit information is the same at all three but for the most part the information isn’t even close, even on the same accounts.  What gives?”

The question is a very good one because it underscores the issue of consumer confusion about credit report inconsistency. A little credit reporting agency background will help to answer the question.

There are three generally recognized national consumer credit reporting agencies; Equifax, Experian and TransUnion. While we may view them as being partners, they are actually competitors. And, as with most competing organizations, they do not share information with each other.

Each credit reporting agency is responsible for compiling and maintaining their own credit file database. Each of the bureaus has around 200,000,000 credit files in their systems. Having said that, there is no guarantee that those 200 million files belong to the same consumers across the Big Three.  Finally, there’s no guarantee that the information housed in your Experian credit file is the same as the information housed in your Equifax credit file or your TransUnion credit file.

Providing information to a credit reporting agency is voluntary.  You cannot force your lenders to report to the credit bureaus.  And, the credit reporting agencies do not have accept information from a lender. There is no language in the Fair Credit Reporting Act that compels anyone to report anything to a credit bureau.

The voluntary nature of credit reporting all but guarantees differences in your credit reports.  And, differences in your credit reports mean different credit scores. The question is whether or not this is a big deal for you, or not.

Most credit reports are heavily redundant, but even redundant credit reports are not identical. If Bank A reports to the credit bureaus at different times of the month then even though the account is showing up on all three of my credit reports there’s no guarantee the information associated with the account will be the same. Even if Bank A sends their update to all three credit bureaus on the same day there’s no guarantee the credit bureaus will all update their files at the same time.  Remember, they’re competitors.

Where you may find some data inconsistencies is from smaller lenders and credit unions.  Some smaller lenders choose to not have accounts with all three of the credit reporting agencies. And, without a relationship with a credit bureau, the lender is not going to be able to report information to them.

When it comes to public records, bankruptcies will tend to find their way to all three of your credit reports.  However, when it comes to tax liens and judgments it’s been my (non-personal) experience that there is considerable inconsistency between the credit bureaus. This means your judgment or tax lien may show up on only one of your three reports.

Public records are not reported to the credit bureaus like a bank loan or a credit card.  The credit bureau proactively goes to courthouses and collects public record information. This can be done through PACER or other public record gathering services.

You can take advantage of data differences best by having a solid understanding of not only what’s on your reports but also how your credit reports score. For example, if you know your Equifax credit report is reporting a tax lien that’s not being reported on your Experian or TransUnion credit reports you may have a lower score at Equifax because of the negative item.  In a situation like that, it might benefit you to apply for credit with lenders that are not going to pull your Equifax credit report.  How will you know which report they’ll pull?  Ask them…it’s not national security.

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