Q? – Why are borrower FICO scores often different between bureaus and credit reporting agencies?

A: There are 2 reasons a borrower’s score may differ between credit reports – even if those reports were produced at virtually the same time.

1) Different Repository Data

FICO scores can vary between repositories and credit reports - even when created at virtually the same time.
FICO scores can vary between repositories and credit reports - even when created at virtually the same time.

This accounts for most of the score differences.  Remember that the FICO score is based on what’s contained in that consumer’s repository file at the moment the score was created. If an item has been updated (e.g. a balance changes, or new delinquency appears) the resulting score will change. Even the existence of a new revolving or finance account inquiry will have a negative impact on your borrowers FICO score.

A common reason for differences in repository data (and consequently FICO scores) are data set issues. Here’s a frequent occurrence,

You run a credit report on Bob Smith, and use his current address where he’s resided for the past year. The lender then runs a credit report under Robert A Smith Jr. (the applicant’s full name) and also includes his prior address of 10 years. It’s a virtual certainty that these variations will return different credit data, and different FICO scores. To avoid these and other problems caused by data set issues (missing files and scores, merged or mixed files…), make sure you run the applicants full name, including any suffix and at least two years of residence history

2) Different Scoring Models
Make sure you’re comparing “apples to apples.” Look at the scoring models used when comparing credit reports to make sure both reports are using the same FICO scoring models. Currently utilized  models include,

Experian – Fair Isaac Version 2
Trans Union – FICO Classic 04 or 98 (Previously known as Emperica)
Equifax – Beacon 5.0
(FICO 08 will be available late 2009)

You may recall hearing about other scoring models. “Next Gen Scores” were a scoring model created by Fair Isaac that never caught on.  The GSEs’ (FNMA, FMAC…) do not, nor does any lender we are aware of accept Next Gen scores. Also watch out for Vantage scores which is a scoring model developed by the repositories and often sold in consumer channels including FreeCreditReport.com and AnnualCreditReport.com. They are also not used in mortgage lending and usually produce score values higher than FICO scores. These higher score values often add to consumer frustration when applying for a mortgage as an applicant may have acquired a copy of their credit file through a consumer channel, and incorrectly believes they are looking at their FICO scores.

Have a question about credit reporting, FICO scoring or rescoring? We welcome your questions and comments and may include them in future editions of Q? in CTNe.ws –  Simply enter your question or comment in the comments section, or if you prefer you can email us at Questions@CreditTechnologies.com.

© Copyright 2009 , Credit Technologies, Inc. – All Rights Reserved.  FICO® is a registered trademark of the Fair Isaac Company

Thomas Conwell

President and founder, Credit Technologies, Inc. Past President/Director National Consumer Reporting Association (NCRA.)