TRANSUNION VS EQUIFAX: Differences

TransUnion vs Equifax
Image Credit: Mutiny

Which of these offers the best credit score: TransUnion vs. Equifax or FICO vs. Experian? Either or all of them are perfect. Banks and other lending organizations in the US use Equifax, Experian, and TransUnion to assess people’s creditworthiness. These are credit bureaus that provide information to creditors requesting the credit report of borrowers. FICO is a third option that’s not among the best credit bureaus but has a model that’s widely accepted by lenders across the United States. Although these companies are related in purpose, they differ in practice. They have distinct features that cause their credit to differ from one another.

TransUnion vs Equifax Score

Equifax and TransUnion are two of the three best credit bureaus in the United States. We’ll look at their key differences, but before then, let’s see take a look at these two bureaus.

TransUnion

TransUnion was established in 1968 as a holding company for the Union Tank Car Company, a railroad leasing company. It is an American consumer credit reporting agency that manages the credit reports of over one billion consumers across 30 countries. They are one of the best credit reporting agencies. Although U.S. law mandates them to offer consumers one free credit report each year, TransUnion sells credit reports and other fraud and credit protection goods directly to customers. In contrast with Experian vs. Equifax, TransUnion is the smallest of the three. In preparing its report, it uses the 84-month credit history to determine a borrower’s creditworthiness.

Equifax

Equifax tracks your accounts in a different way than the other credit reporting bureaus, which explains why it gives you a slightly different score. Firstly, it divides your credit accounts into “open” and “closed” categories rather than combining all of your current and previous accounts. Secondly, it employs a credit history of 81 months, as opposed to the standard seven years used by other agencies.

Transunion vs Equifax Score: Differences, Similarities, and How It Works?

These two are part of the three major credit bureaus in the United States. In terms of similarities, TransUnion vs Equifax creates a credit report and equally sells this to lenders. They also provide credit monitoring services to individuals. The credit monitoring service enables individuals to track their Vintagescore. However, the information each of these companies uses to create credit reports is gathered from lenders and debt companies.

What are the Key Differences Between TransUnion and Equifax?

Differences in the credit reports, prices of credit monitoring services, time frame considerations, credit reports, credit monitoring, identity theft protection, credit advice, and credit advice are some of the key differences between these two. The following are the difference between TransUnion and Equifax.

#1. Credit Advice

In terms of credit advice, TransUnion uses its credit compass to advise clients on how to improve their credit scores, unfortunately, Equifax is yet to offer this feature. 

#2. Different Credit Report

The first difference between these two credit bureaus is their credit report. The credit report, as well as credit score, differs from one to the other. Their report is always slightly higher or lower than the other. However, it can differ by a significant number.

#3. Access to Credit Report

Access to credit reports is another key difference between TransUnion and Equifax. While the first only provides you with access to their own reports, Equifax provides you with daily access to their own records as well as annual credit reports from all three bureaus.

#4. Time Frame Consideration

In terms of the length of time that each credit bureau put into consideration in calculating credit reports and scores, TransUnion credit reports’ payment history considers a credit history as far back as 84 months. Equifax on the other hand only uses 81 months.

#5. Access to Credit Score

In terms of access to credit score, you can access your VantageScore, with TransUnion and Equifax. However, beyond your Vintage Score, Equifax allows clients to access their annual VantageScore credit scores from the other two credit agencies.

#6. Credit Different Monitoring Services

The prices of credit monitoring services that these two offer is also another key difference between them. While TransUnion has a free plan in addition to its subscription plan that costs $24.95 per month, Equifax has various plans that range from $4.95 to $19.95 per month. Experian, TransUnion vs Equifax will update you on any change or alteration to your credit reports. However, in addition to the credit report, gives you updates on your credit score too. 

#7. Additional protection features for families

Equifax offers credit monitoring for an extra adult and four kids in addition to other safety features for families But TransUnion doesn’t.

Transunion vs Equifax vs Experian: Differences, Similarities

These three are the major credit bureaus in the United States. In terms of similarities, they all offer credit reports to individuals and creditors. Each of them gives credit reports, offers credit advice, protects identity on a paid subscription, and also updates clients on credit updates.

Difference

The difference between these top credit bureau agencies is in the table below.

KEY DIFFERENCEEQUIFAXEXPERIANTRANSUNION
Average Number of employees11,00017,0008,000
Central Base/ LocationAtlantaCosta Mesa CaliforniaChicago
Credit Score ModelFICO 8 and VintageScoreFICO 8 and VintageScoreVintageScore
Credit AdviceNoneOffer Experian credit boost and Credit match. The first improve credit score and the second help client find credit offers.TransUnion uses its credit compass to advise clients on how to improve their credit scores
Businessyield

Experian vs Transunion vs Equifax: Do I Need All Three Credit Scores?

Yes, however, there’s no law that mandates everyone to get a report from these three. This means it isn’t compulsory but it’s necessary. Why?  Most often, the credit scores of these three differ. So it’s important that you review the free report that the U.S law mandates each of these credit bureaus to give you once a year. In terms of credit score, Experian vs TransUnion and Equifax mostly give a different report that is slightly higher or lower than each other.  It is therefore important for consumers to review each report and score because credit information since they differ and note the variation.

What Causes the Variation in Credit Reports?

Each company reports its credit with different information. For instance, Experian may intentionally exclude certain information, while Equifax will include it. This, however, boils down to the details on the credit report.

FICO vs Transunion vs Equifax

In terms of FICO vs TransUnion and Equifax, the first is a company that designed a system that assigns numerical scores to borrowers’ creditworthiness ranging from 300 to 850. while the other two use customer information to provide credit reports for lenders. If you have come across VantageScore, it’s nothing strange. VantageScore is a system designed by Experian, Equifax, and TransUnion.

FICO and Its Credit Score

Fair Isaac and Company, now The Fair Isaac Corporation designed the FICO credit score metrics in 1989. It is simply a mathematical system or algorithm that determines a borrower’s credit score using information from credit bureaus. Then they place the borrower in the numerical range of 300–850. The higher the number, the more credible the borrower is.

How Does FICO Calculate Its Credit Score?

The company calculates its credit score using a 35:30:15:10:10 ratio.

  • 35%-Borrowers’ payment history
  • 30%-Outstanding
  • 15%-Length of Credit History
  • 10%-Credit mix account
  • 10%-New Credit

Although the above is the information that the company uses in determining a borrower’s credit score, their exact approach remains a secret.

Which Do Creditors Prefer, FICO vs TransUnion or Equifax?

Most lenders prefer FICO, but in some cases, both the credit report and the credit scores from bureaus are acceptable. Depending on the loan amount you desire to access, most lenders will compare your FICO vs TransUnion, Equifax, or Experian vintage score before approving your loan. Interestingly, credit bureaus like Equifax will usually provide a third credit history aside from FICO and Vintagescore. There are also lenders that will make do with your FICO credit score, but most will likely demand a credit report.

How Do Improve my FICO Credit Score?

Having multiple credit accounts and excellent payment history. There are two ways of improving your credit score on FICO reports. The first is to have multiple credit accounts and the second is to have an excellent payment history. This has a lot to do with how well and how promptly you make your payment when due.

Why is my Equifax Score Higher than TransUnion?

Creditors’ varying information, time of updates, and metrics used in determining credit reports or scores are reasons why TransUnion vs Equifax differs.

#1. Time of Updates

Even though these two companies inform their clients about updates, it is reports were not generated at the same time. Creditors submit information to these bureaus at different times, and your report may have a positive or negative flow before it gets to the other bureau. 

#2. Creditors Information Varies

The most common reason why your TransUnion score will differ from that of Equifax is the data gathered from creditors. Credit Bureaus work with the information they gather from creditors, and your creditor may submit your data to one and not the other. It’s important to note that not every creditor will report to these two companies. For instance, Royce Mortgage may report to Experian and Equifax leaving out TransUnion.

#3. Models Used In Generating Reports

Every bureau uses a credit model that is most suitable to them. Although Experian, TraunsUinon, and Equifax developed the VintageScore, they still use personalized models to assess borrowers at times. Additionally, these credit bureaus use metrics and specific standards that show their expertise. This means that, while a company may choose to overlook an item, the other may include it, hence the reason for the difference report. 

Conclusion

Whether you want to apply for a loan or not, it doesn’t hurt to know your credit score. Since U.S law mandates these guys to give you a credit report once a year, going through it and improving your credit score on rainy days shouldn’t be a problem. Additionally, you can choose to register with at least two, or even all three of them to know your credit score and report.  

Transunion Vs Equifax FAQs

Is Credit Karma accurate?

Yes, it is. Credit Karma claims their information reflects the exact same thing as what you have with your credit bureau. In addition, Credit Karma uses two credit bureaus to calculate every credit score. 

Which credit report is most accurate?

FICO and VantageScore credit-scoring models. The VantageScore credit-scoring model is used by the three best credit bureaus in the United States. These are Equifax, Experian, and TransUnion.

Is Equifax more important than TransUnion?

In reality, no. Both are credit bureau agencies that use various methods to calculate borrowers’ credit reports and scores. Additionally, they are also two of the three biggest credit agencies in the U.S.

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