Experian vs. Equifax vs. TransUnion credit reports: What are the differences?

Credit reporting agencies (aka credit bureaus) are responsible for collecting consumer credit data that businesses then use when assessing a person’s ability to meet certain financial obligations.

• A bank, for example, might use a borrower’s credit score to determine what interest rates to charge on a loan or credit card. A low score could indicate a greater risk of not being paid in a timely manner or at all. As such, that lender may charge a higher interest rate.
• Many landlords use credit scores when interviewing apartment candidates. Those with lower scores may have to pay larger deposits or higher rent to qualify for a new lease.

This is why monitoring your credit score is important.

How to get a free copy of your credit report

Fortunately, getting a hold of your credit report is incredibly easy — especially if you go through one of the three-biggest credit bureaus: Equifax, TransUnion, and Experian.

To get started, visit Annual Credit Report.com. You’ll need to complete a request form, so be sure to have the following details on hand to verify your identity:

• First and last name
• Mailing address(es)
• Social Security number
• Date of birth

Under the Fair Credit Reporting Act (FCRA), federal law requires that every American is allowed one free credit report every 12 months from  each  of the three major bureaus. This means you don’t have to choose one reporting agency over another.

In fact, you shouldn’t rely on any single report, since your score will likely differ among the three bureaus.

Comparing your credit score among agencies

Your credit score should be roughly the same from bureau to bureau, but it probably won’t be exact. There are several reasons why:

• Each credit reporting agency collects information in slightly different ways, meaning that scores can vary somewhat — even if it’s the same person.
• Lenders, creditors, and businesses send information to these reporting agencies at different times. It’s possible that Equifax could be working from a more recent snapshot of your financial history than TransUnion.
• All three of the major credit bureaus use their own internal algorithms when determining a person’s score. Even if the starting information is identical, the final result may differ.
• It could be that the credit reporting agencies are tracking the same person under different names. This sometimes happens with marriages or adoptions. Still, mistakes like this can be rare since Social Security numbers are unique.

Because of these potential differences, it is vital that you  do  request credit reports from all three agencies. Mistakes or blemishes could go undetected for years if you only have access to a single report.

This is particularly true if you’re one of the 5.88 million Americans who fell victim to identity theft in 2021.

How to clean up mistakes in your credit history

Requesting free reports from all three of the major credit bureaus annually can help provide you with the most complete snapshot of your financial history. If there are mistakes or blemishes on your report, it is critical that you work to correct them as soon as possible. Otherwise, it could have an impact on your opportunity to finance important life choices like starting a business, buying a home, or funding your education.

The moment you spot anything out of the ordinary, call that lender, creditor, or merchant immediately to assess the problem. Be sure to keep your bank or credit card issuer in the loop, as well.

You’ll also need to contact all three of the reporting agencies, since they’re the ultimate gatekeepers of your credit history. You can jump straight to their respective homepages by clicking the links below:

• Equifax
• Experian
• TransUnion

Some mistakes can be fixed with a few simple phone calls. Others might take weeks or months to resolve.

Your credit score might  also  be low if you’re carrying a lot of consumer or business debt. For tips on paying loan balances and climbing out of debt, be sure to check out our article on National Credit Education Month.

Personal vs. business credit score

Whereas your personal credit score is tied to your unique Social Security number (SSN), a business credit score is linked to an employer identification number (EIN) or tax ID number. If you’re a sole proprietor, you technically do not need an EIN, but it is important for establishing business credit.

Experian and Equifax have business credit reporting services; however, one of the largest and well-known credit reporting services for business is Dunn & Bradstreet.

Your personal credit history is separate from your business profile, and the two are calculated differently. The credit bureaus use a FICO® scoring method to determine your personal score. This is based on several main categories, including:

• Payment history
• Amounts owed
• Lengths of credit history
• New credit accounts
• Types of credit used

For businesses, there is no equivalent scoring method. Each commercial credit bureau analyzes and scores its own way. Some of these factors typically include:

• How you pay your bills
• How much debt you carry
• What type of industry you’re in

With fewer variables to consider, it can be easier to improve a business credit score over a personal one. That being said, while consumers are protected under certain credit protection laws, there are no such laws for businesses, and it may be harder to challenge discrepancies with the specific business credit agencies.

Other articles you may like

• Access business credit scores and find funding for free with Nav
• March is National Credit Education Month
• Why Clover merchants should monitor their financial health with Nav

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

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