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TransUnion® Vs. Equifax®: Which Score Matters More?

5-Minute ReadJune 06, 2022

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Looks can be deceiving when it comes to your credit score. If you’re worried you may have a low credit score, it may depend on which credit reporting agency you’re referencing.

Two of the biggest credit bureaus are TransUnion® and Equifax®, and while they both collect and store your credit information, they do so in slightly different ways.

This article will take you through the processes that TransUnion and Equifax use to calculate your credit score, and explain why you may see different results between the two credit bureaus.

What’s The Difference Between TransUnion And Equifax?

As mentioned above, TransUnion and Equifax are part of the “big three” credit reporting agencies – Experian® being the third. Ultimately they offer the same service, which is to collect and provide consumers’ credit information using personal information and public records. This includes generating a credit score that you can use to showcase your creditworthiness to potential lenders.

How this service is offered is where TransUnion and Equifax differ. Let’s take a look at some of the features each agency offers.

TransUnion

TransUnion was founded in 1968 and is based in Chicago, Illinois. It offers a consumer credit monitoring plan at the cost of $24.95 per month that includes the following services:

  • Unlimited score and report access. TransUnion’s services allow you to check your credit report and score, which are updated daily, as often as you like.
  • Credit locking. The Credit Lock Plus service allows you to lock and unlock your credit reports from your computer or your phone.
  • Identity theft protection. A TransUnion plan offers identity theft protection that includes instant email alerts, insurance of up to $1,000,000 and toll-free access to identity theft specialists.
  • Personalized analysis. You can get a personalized analysis of your credit report and get recommendations for how to improve your credit.

Equifax

Equifax, founded in 1899 and currently headquartered in Atlanta, Georgia, offers three main plans for its members.

  • Equifax Complete™. The basic Equifax Complete plan is $9.95 per month and gives you daily access to your credit score and report, and includes daily credit monitoring. You will receive alerts of any changes in your score or report. In the event of identity theft, you will be assisted by a team of ID Restoration Specialists or insured for up to $500,000. You can also lock your credit report.
  • Equifax Complete Premier. At $19.95 per month, you get all of the services of the Complete plan, but with a 3-bureau annual credit report and scores, plus 3-bureau credit monitoring. This means that TransUnion and Experian will also be notified of any changes to your report. Additionally, you’re insured for up to $1,000,000 for identity theft, and can receive a stolen funds replacement.
  • Equifax Complete Family. This plan costs the same as the Premier plan and offers all of its services, with the option to extend them to a second adult, as well as limited services for up to four children.

TransUnion Vs. Equifax: Calculating Your Credit Score

The two agencies also differ in how they calculate your credit score.

Credit Score Ranges

TransUnion uses the VantageScore® model when calculating your credit score, based on a range of 300 – 850. A “good” score may rest in the 661 – 720 range.

Equifax, meanwhile, uses its own scoring model with a range of 280 – 850, with “good” being 670 – 739 and higher. Their algorithm closely resembles the FICO® model.

How They Calculate Your Score

TransUnion and Equifax can pull your credit information from similar sources.

Creditors are an important source of information for these agencies. These include credit card issuers, banks and lenders who may have lent you money in the past. These institutions report information on their borrowers to credit reporting agencies like TransUnion and Equifax.

Credit bureaus can also access your information from public records, like reports of bankruptcy or tax liens.

What Factors Affect Your Credit Score?

How your credit score comes out may be affected by the following factors:

  • Your payment history
  • Your amounts owed
  • The length of your credit history
  • How many credit lines you’re currently managing
  • Any new lines of credit you’ve applied for

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TransUnion Vs. Equifax: Why Your Scores May Differ

The main reason your TransUnion and Equifax scores may look different from one another is that the companies use different algorithms to compute your score.

Credit bureaus can only work off of the information they receive, and in some cases, creditors may not report the same data to each agency, or may only report to one or two of them.

On the other hand, some credit bureaus may collect information that the others don’t. For example, Equifax is known to report longer credit histories for borrowers than TransUnion or Experian. Additionally, TransUnion may report your employment history and personal information to determine your creditworthiness, while Equifax and Experian may only report the name of your employer.

Which Score Is More Accurate?

Neither score is more or less accurate than the other; they’re only being calculated from slightly differing sources. Your Equifax credit score is more likely to appear lower than your TransUnion one because of the reporting differences, but a “fair” score from TransUnion is typically “fair” across the board.

What To Do If Your Credit Scores Are Different

There is little you can do, besides building your credit up, to affect the outcome of your score if it’s different between bureaus, but if you think there are errors in your credit report, you can file a dispute with whichever bureau you believe made the mistake.

TransUnion Vs. Equifax: Why Your Scores May Differ

The main reason your TransUnion and Equifax scores may look different from one another is that the companies use different algorithms to compute your score.

Credit bureaus can only work off of the information they receive, and in some cases, creditors may not report the same data to each agency, or may only report to one or two of them.

On the other hand, some credit bureaus may collect information that the others don’t. For example, Equifax is known to report longer credit histories for borrowers than TransUnion or Experian. Additionally, TransUnion may report your employment history and personal information to determine your creditworthiness, while Equifax and Experian may only report the name of your employer.

Which Score Is More Accurate?

Neither score is more or less accurate than the other; they’re only being calculated from slightly differing sources. Your Equifax credit score is more likely to appear lower than your TransUnion one because of the reporting differences, but a “fair” score from TransUnion is typically “fair” across the board.

What To Do If Your Credit Scores Are Different

There is little you can do, besides building your credit up, to affect the outcome of your score if it’s different between bureaus, but if you think there are errors in your credit report, you can file a dispute with whichever bureau you believe made the mistake.

TransUnion Vs. Equifax: Which Score Is More Important?

While no credit score is necessarily better or more accurate than the other, it can make a difference when you’re trying to get a mortgage, auto loan or personal loan.Lenders typically use your FICO® Score to gauge your creditworthiness, and since Equifax’s algorithm more closely resembles the FICO® model, your Equifax score may better reflect whether you’ll qualify for the loan you want.Your Equifax score won’t be a tell-all, though. Lenders may look at your scores from all three credit bureaus and take the median score for the qualification process. If they only look at two of the three bureaus, they’ll likely take the lower of the two scores.If you’re co-borrowing a loan, lenders will take the lowest median of the two parties.Since different algorithms are used across the different credit bureaus, an “excellent” score may appear “good” on another scale. If you’re applying for a personal loan wanting good rates and terms, you should make sure your lowest of your three scores can qualify you for that loan.A good credit score for a personal loan would be 650 or higher if you’re looking for favorable rates and terms. 

Final Thoughts

It may seem confusing to keep track of your credit scores across three different credit bureaus, but know that having varying scores isn’t necessarily a cause to worry.

Credit scores from TransUnion and Equifax may only appear different because of the different ways they’re calculated. Errors can always be disputed with the bureaus themselves, but you can really only control the factors that affect how your score comes out.

A good or excellent credit score can net you favorable rates and terms for the loan you want. See what personal loan rates you may qualify for by getting prequalified with Rocket Loans®.

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