Why Do I Have More Than One Credit Score?

Checking your credit scores and reports on a regular basis (at least once a year) is a healthy financial habit all Canadian adults should have. This will allow you to check to make sure all the information is correct and even monitor for signs of identity fraud. In Canada, one consumer will usually have many different credit scores. This is because there are many different scoring models and credit score providers. Having different credit scores is completely normal, this article will help you understand why.

What Is A Credit Bureau And How Do They Get Their Information?

A credit bureau is a company that collects information from lenders and creditors about a consumer’s credit history. They also collect information from courthouses and the office of the Superintendent of Bankruptcy. This information is used to compile a consumer’s credit report which the credit bureaus will share with third parties when authorized in order to help them assess the consumer’s creditworthiness. 

Type Of Information Reported To The Credit Bureaus

The two credit bureaus do not always receive the same information, as not all lenders and creditors report to both credit bureaus. In fact, some don’t report your credit information to either depending on their policies and preferences. In general, the credit bureaus will collect information such as: 

• Your Personal Details -May include your name, address and employment
• Your Tradelines – May includes existing loan details and credit behaviour
• Credit Inquiries – It may also include any hard credit checks
• Public Records – This can include derogatory records such as any lawsuits or bankruptcies 

Credit reports contain a lot of personal and sensitive information, a third party cannot obtain a consumer’s report without authorization. 

Why We Have More Than One Credit Score

In Canada, a consumer can check their credit score from the two credit reporting bureaus, a third-party credit score provider, or their bank if they offer this service. It is likely that if one individual were to check their credit from four different companies, they would see four different scores. There are several reasons for this:

Difference In Data Reported

Not all lenders and creditors report to both credit bureau (some resort to only one or neither) which means that information included in one score may not be included in the other, causing a discrepancy. In addition, sometimes there is a lag between the time information is received by the credit bureau and when it is updated on your report. 

Information Reported At Different Times

If you check your credit score at different times in the month, you will likely see a discrepancy because of the variance between when certain information is reported. Lender and creditors may report information to each credit bureau at different times. This means one of your credit scores may be more up-to-date than another. 

Multiple Credit Scoring Models

There are many different types of scoring models and depending on which model the credit bureau or credit score provider is using, the credit score they provide you will differ. While the purpose of all credit scores is to let lenders and creditors, who want to enter into an agreement with you, know what the likelihood is that you will make your payments on time. And the same five main factors are used to calculate all credit scores, different scoring models will give more weight to specific factors. 

Fragmented Credit Reports

Individuals that go by a different name than their original birth names, such as a nickname or maiden name, tend to have fragmented credit reports. This occurs because the credit bureau has failed to combine your information related to both names causing fragmented records. Fragmented credit reports are seen most commonly in transition periods between name changes.

Credit Monitoring Services

If you use a credit monitoring service, the scores provided are merely estimations. These services are designed to indicate how your credit score is doing compared to others. This means it will differ from the credit score a lender may see if checked your credit and will also differ from the credit scores provided by the credit bureaus. 

	Cost	Credit Score	Credit Report
	Free	Yes	Yes	Visit Site
	Free	Yes	No	Visit Site
	Free	Yes	Yes	Visit Site
	Free	Yes	Yes	-

Which Credit Bureau Is Most Important?

Between Equifax and TransUnion, neither bureau is better than the other. However, one bureau could be more favourable to you on an individual basis. Since both credit bureaus have their own credit scoring model and have different information on you, the way they calculate your credit scores will differ, This typically results in one credit bureau scoring you higher than the other. 

As such, you may want to work with a lender who pulls credit reports from the credit bureau that scores you higher. For example, if your bank uses Equifax for their applicants and you’re applying for a mortgage with them, then Equifax would become the more important bureau to you.

Additional Reading

Credit Score vs. Credit Rating

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What Your Credit Score Range Really Means

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Why Isn’t My Credit Score Showing Up?

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Bottom Line

Having multiple different credit scores is very common and while it may seem problematic if one is lower than the other, in reality, it is simply a result of the variance in the credit reporting processes and systems. It’s always a good idea to monitor both reports and check your credit scores on a regular basis.