If your credit reports show different scores, what should you do?

Credit reports provide a snapshot of your credit activity. Typically, lenders and other companies use credit reports to gauge their risk with each consumer. A strong credit report increases the likelihood of landing a loan, an integral component of many home purchases.

Although the three major credit bureaus follow the same model to calculate your FICO score, slight variances may yield credit score differences across your reports.

Equifax, Experian, and TransUnion may each provide you with a different credit score. While this might create confusion along the consumer journey, the simplest way to start building a strong credit score across the board is to manage your debt obligations responsibly.

Breaking down the FICO scoring model 

Your FICO score impacts your ability to access loans and what interest rates you receive on those loans. Your FICO score ranges from 300 to 850, with higher scores providing more financial perks. These five components determine your FICO score: 

Payment history — 35% of your FICO Score

Payment history makes up the bulk of your FICO score. This component informs lenders of your ability to fulfill debt obligations. Paying your bills on time may raise your score, while falling behind may hurt it. Creditors and lenders do not report the delinquency until the account is 30 or more days past due.

If your payment history is shaky, your credit score could suffer. However, there are ways you can get back on your feet and raise your credit score. Consider the help offered by MoneyLion Credit Builder Plus. This $19.99/month membership program offers members access to a loan of up to $1,000 to help establish or rebuild their credit score. More than half of MoneyLion members raise their credit score by 42+ points within 60 days.¹. Get started with Credit Builder Plus here.

Amounts owed — 30% of your FICO score

“Amounts owed” ranks slightly below payment history, but it still makes up a considerable percentage of your credit score. Lenders want to ensure a consumer can handle the extra debt from a new loan. The amounts-owed category weighs heavily on your credit utilization. This metric compares your credit card debt against your credit limit.

For instance, if you owe $500 on your credit card, and your credit limit sits at $5,000, your credit utilization ratio is 10%. You could improve your credit utilization ratio by paying off credit card debt and keeping your limit unused/underutilized. A credit utilization ratio below 30% could help your credit score.

Length of credit history — 15% of your FICO score

A lengthy credit history indicates more experience with paying off debt and may help strengthen a credit score. 

New credit — 10% of your FICO score

New credit is a complicated component of your FICO score, consisting of short-term downside and long-term upside. Applying for new credit may trigger a hard credit inquiry. These inquiries might knock a few points off your credit score. Creating many accounts in a short span may place a considerable dent in your FICO score, which may affect future creditor decisions. 

Credit mix — 10% of your FICO score

Obtaining new credit at a healthy pace will help assist with your credit mix. Although the hard inquiries may hurt in the short term, diversifying your credit will help positively impact your credit score in the long term. Mixing revolving debt (i.e., credit cards) with installment debt (i.e., loans) will assist with your credit score.

The Credit Builder Plus Loan offered by MoneyLion allows you to benefit from the perks of the credit mix and will also help build up your payment history, with on-time payments, which make up 35% of your credit score. Get started with MoneyLion Credit Builder Plus today. 

Revamp your credit without any hard inquiries

Some people saw their credit scores fall amid past financial missteps and hardships. Others do not have a credit score. Whether you are looking to rebuild your credit or establish a credit history for the first time, MoneyLion has you covered.

The MoneyLion Credit Builder Plus membership assists individuals with low or no credit. The Credit Builder Plus membership provides access to the following perks:

• Credit Builder Plus loan with access to a portion of the funds right away.

• Credit monitoring 

• Weekly credit score updates

• Higher limits in Instacash^SM

• Lion’s Share Loyalty Program

• Personalized credit building insight

Take the following steps when applying to Credit Builder Plus: 

1. Download the MoneyLion app on your smartphone.

2. Create your customized profile and link your bank account. 

3. Complete and submit the Credit Builder Plus loan application.

4. Receive a rapid response and accept your loan offer. 

You may be eligible for Credit Builder Plus if your bank account is in your name, at least 60 days old, and in good standing. The account activity should reflect a steady stream of income. Benefit checks are acceptable income streams for the MoneyLion Credit Builder Plus Program. 

It only takes a few minutes to apply. You can get started and receive a portion of the proceeds in minutes. The remaining funds get saved for you in an interest-earning Credit Reserve Account until you pay off the full amount.

MoneyLion reports your payment activity to the three credit bureaus each month to help build your credit rating. 

The best way to address credit score differences

Due to the various inputs, it’s common to find credit score differences across the three bureaus. Rather than aim for a uniform credit score across the bureaus, focus on improving your credit score so you present lenders with solid numbers across the board.  MoneyLion Credit Builder Membership may help you increase your credit score. The loan is accessible to people with low or no credit. Credit score differences won’t go away, but you can keep working to improve them with Credit Builder Plus.

FAQ

Which credit report is most accurate?

Lean on the credit reports from the three credit bureaus. If considerable differences exist, review them to see if a lender or creditor failed to send important activity to one of the bureaus.

Why did my credit score go down when nothing changed?

Credit scores decline for various reasons. Some people see their credit scores take a dip soon after becoming debt free.

What is an average credit score?

According to Experian, the average credit score rose to 711 in 2020. The average credit score varies across bureaus. Focus on raising your credit score, and you could find yourself with an above-average credit score.