Experian or equifax which one better

Although borrowers can explain negative items in their credit report, the fact remains that having a low FICO score is a deal-breaker with numerous lenders. Many lenders, particularly in the mortgage industry, maintain hard-and-fast FICO minimums for approval.

One point below this threshold results in a denial. Therefore, a strong argument exists that borrowers should prioritize FICO above all bureaus when trying to build or improve credit. FICO's biggest drawback is that it leaves no room for discretion. If borrowers apply for a loan that requires a minimum of FICO for approval and their score pulls as a , then they are denied the loan, regardless of the reason for their score.

It could be something that in no way implies a lack of creditworthiness for the particular loan being sought, but unfortunately, the FICO scoring model does not lend itself to subjectivity. Borrowers with low FICO scores who have quality information in their credit reports should pursue lenders that take a more holistic approach to making credit decisions. Experian is one of the three major credit bureaus that produce reports detailing consumers' borrowing habits.

Creditors, such as mortgage companies, auto finance companies, and credit card companies, report borrowers' outstanding debt and payment histories to Experian, as well as to its peers Equifax and TransUnion TRU. The bureaus organize this information into reports that break down which accounts are in good standing, which are in bad standing, and which are in collections and public records, such as bankruptcies and liens.

Experian's advantage over FICO is that the information it provides is more thorough than a simple number. A pair of borrowers could both have FICO scores but vastly different credit histories.

By reviewing Experian credit reports, lenders can look at each borrower's actual credit history—every debt that person has owed for a decade or longer—and analyze how that person managed that debt. The main disadvantage of Experian is that, unlike FICO, it is rarely used as a standalone tool to make credit decisions. Even lenders who review credit reports in detail rather than going off a borrower's numerical score generally look at results from all three bureaus, not just Experian.

Consequently, borrowers should periodically review all three credit reports to keep an eye out for erroneous or derogatory information. Like Experian, Equifax is a major credit-reporting bureau. It produces credit reports similar to those from Experian and that follow a similar format. Equifax reports are detailed and easy to read. If a borrower who five years ago paid a credit card bill late applies for a loan, a lender reviewing his or her Equifax report can pinpoint the exact month of the late payment.

The report also indicates debts owned by collection agencies and liens against the borrower's assets. Equifax offers numerical credit scores that range from to The bureau uses similar criteria as FICO to calculate these scores, but as with Experian, the exact formula is not the same.

The advantages of Equifax are similar to those of Experian. The bureau's reports are detailed and provide lenders with deeper information about a consumer's borrowing habits than just a number. Its disadvantages are also the same. Borrowers cannot safely gauge their chances of loan approval by looking at their Equifax report alone. However, if their Equifax report is much stronger than their Experian report or FICO score, then they have the ability to search for lenders that prioritize Equifax.

Fair Isaac Corporation. Building Credit. Credit Cards. Actively scan device characteristics for identification. If the scores vary based on the same scoring model, then Credit Report information could be different at each of the 3 bureaus. For example, one bureau may have 6 hard inquiries on its credit report, another may have 2, and the last bureau may have 4.

Since the number of hard inquiries is a factor in calculating your Credit Score, this could produce different score numbers, even though it is based on the same scoring model.

Information reported to each of the 3 bureaus can be different and the individual creditors furnishing data may also be different, meaning one creditor may only report to one or only two of the three bureaus.

Lenders, such as mortgage companies are not required by law to report account information to each of the 3 bureaus. One credit scoring company might give more weight to late payments, while another might focus more on your auto loan history or a mixture of credit.

Essentially, this means that your score can not only be confusing but also that there is no such thing as an "accurate" credit score. Each formula uses factual information from your credit history. However, each weighs and calculates that information differently. Although there are many different scores and scoring models, there is a light at the end of this confusing tunnel.

You might have a different score calculated by a different scoring model with a different provider. However, it's very likely that the lender or creditor will use the FICO score to determine if they'll approve your application for a new line of credit.

Because of this, you might want to keep your eye on your FICO score, rather than many of the others that are available, simply because this is the number the lenders care about most. A FICO score ranges from to higher is better. Advised to use secured credit cards and loans to help rebuild credit. At that time, it was referred to as Fair, Isaac, and company.

The FICO score is based on the information in your credit files, provided by the three national credit bureaus. This score is designed to take into account various elements of your financial history.

No one really knows the exact formula for calculating your FICO score, but there are certain factors that we know impact your score. Along with being aware of the many different types of scores and which ones are most often used by creditors, you should know how your FICO score is calculated. The factors that impact your FICO score include the following:. Determined by dividing total debt by total credit limits. Longer histories tend to show responsibility with credit.

New credit applications tend to hurt you score temporarily. Learn more about FICO credit score. Because there is no shortage of companies, products, and websites offering access to free credit scores, it can be especially confusing to determine exactly where to find your FICO credit score. You can also use these scores to check if you are making progress on your credit, and if there is a major decline or suspicious activity on your credit report, you can catch it right away. Then, you can at least investigate the activity and fix any issues.

The VantageScore is actually provided directly by the three major credit reporting agencies, instead of a company that uses the information provided by the agencies. Your VantageScore ranges from to The CE Score is used by approximately 6, lenders in the Credit Plus network and is generally free if you want to track your credit.

This score ranges from to