Conflicting Credit Scores

CONFLICTING CREDIT SCORES

Conflicting Credit Scores
QUESTION: For several years I have been signed up for a credit monitoring tool so that I can keep track of my credit. I was recently very surprised when I went into a dealership and I found out that the credit score they told me I have was different than what my credit monitoring tool said I had. Why is my score different?

ANSWER: When you are talking about your “credit” you are really referring to the financial history and information about you that is recorded within the three main credit bureaus.  They are: Experian, TransUnion and Equifax.  Generally the information is the same between all 3 bureaus, but what many people don’t understand is that lenders don’t all look at this history the same way. Whether you are talking about a home loan or an auto loan, each of these industries uses different criteria and assigns different weight to the data within your credit history.

For example, a customer that recently visited us found out that his score pulled by the dealership was actually 100 points lower than his credit monitoring tool. This was because the criteria used for purchasing an automobile was different than the criteria that was being used by his credit monitoring tool. While the credit monitoring programs that exist are wonderful for monitoring issues such as identity theft, it is important to realize that the score they assign to you will not always be the same if you decide to take a loan for a large purchase.

Businesses that make financial assumptions each use different methods or ways to evaluate your credibility as a person (your “credit worthiness”) and some lenders may not care as much about specific transactions or types of activity on your credit report as other lenders do. If you have concerns about what information was used by a lender to determine your credit score, a great tool take note of is the “risk based price notice” form that should be given to you by any dealership that pulls your credit.

If you ever feel that your credit history contains erroneous or inaccurate information, it is very important to get it corrected. Remember, a better credit score can have the potential to save you thousands of dollars in interest. For examples of how credit score can affect your finances, read more at www.ineedcarfinancing.com.

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