If you know anything about your credit, you probably know that you have three credit cards. This is mainly because credit reporting is an independent, money-making business, and there are three credit bureaus out there that will report your credit for you. These companies are in competition, even though they provide very similar information. Equifax, TransUnion, and Experian will all three have slightly different scores for you. Sometimes this is because of mistakes, and sometimes it’s based on slightly different information and calculation.
You may already know that you need to check your credit score before you apply for any major credit, such as a car loan or a home loan. However, did you know that you actually need to check your score with all three companies before applying for these types of major loans? Many people fail to realize this and end up paying way more interest on a loan than they need to. In some cases, this basic mistake may even keep you from getting that credit at all!
Basically, you never know when one credit score is totally different from the others. For instance, if you check your TransUnion score and see that it’s accurate and really very good, you might be tempted to stick with just that information and go ahead and apply for a mortgage. However, the mortgage lender could pull your score from Equifax, which could be dramatically different. If your Equifax score contains a major error, it could keep you from getting the loan that you need for your new home. Even if it has a minor error that changes your score by a few points, it could cause you to end up with a higher interest rate, which could cost hundreds or thousands of dollars a year.
For this reason, you need to pull all three credit scores. Look at them individually, but don’t look just at the actual scores. Even if they are similar, one report could have a minor inaccuracy that could harm your chances of getting the best possible loan. If you notice an error on one of your reports, take time to fix that error before you move into applying for credit. File a dispute with the credit bureau that has the incorrect information, and don’t move forward in the application process until you know that the problem has been fixed. This way, no matter which credit report a lender pulls, you’ll know the report is accurate.