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The Resource Center Credit Fraud & Credit Monitoring | article

Why You May Have 3 Credit Scores That Are Different

If you apply for a home or auto loan, the lender will likely run a credit report at which point you may discover that you have three credit scores that are different. The reason for this is that there are three major credit bureaus in the U.S. which control the majority of the consumer credit reporting industry.

Three Major Credit Bureaus and Inconsistencies

These companies are TransUnion, Experian, and Equifax and they are three separate companies. As such, they each have their own way of operating. In addition, they each have their own methods and formulas for calculating an individual's credit score, which can lead to three different scores on your credit report.

The scores may also be inconsistent because creditors aren't required to report to all three of the credit bureaus. As a result, one credit bureau may have information that the others don't. Sometimes, due to reporting mistakes or identity theft, this information can be inaccurate.

Impact of Identity Theft on Securing a Line of Credit

Some lenders will look at reports from each of the three companies and take all of the numbers into consideration, perhaps coming up with an average or looking primarily at the number from the credit bureau that they have the best relationship with. Lenders know the numbers often don't match and they may take that into consideration when deciding whether approve your home or auto loan or to extend a line of credit to you.

Unfortunately, if you've been the victim of identity theft, the information the credit bureaus have may be inaccurate. This can result in three credit scores that are completely different. As a result, lenders may view you as a credit risk and deny your loan request.

Taking Action against Identity Fraud

Of course, it can be devastating to learn that you're a victim of identity fraud, but there are actions you can take to resolve the situation.

  1. The first is to report the crime to the police.
  2. Next, call each of the three credit bureaus and work to have the false charges removed from your report.
  3. Then, contact your credit card agencies and request credit monitoring. This is a service most credit companies offer to those who have experienced this type of fraud.

Some people choose to take it a step further and get identity theft protection from companies like Identity Guard® which monitor your sensitive information and alert you immediately to any unusual activity. Often, they can also help you resolve issues related to having three credit score that are different.