Different banks and different credit cards use various Credit Reporting Agencies (CRAs) when requesting a credit score. If a consumer is looking for approval, the specific CRA that is used may make a difference. These credit reporting agencies can also be known as credit bureaus.
From a consumer standpoint, the CRA used by the card issuer will determine if the card is approved or not. This is especially important when the consumer applies for several credit cards in a row.
What Credit Reporting Agencies Do
A credit reporting agency’s primary role is to gather and document information relevant to your financial history. That includes outstanding debts, public records, collections, payment history, and more.
These credit reporting agencies don’t talk to each other in real-time. If the consumer has recently applied and received a credit report for another agency, that information might not have made it to the other agencies yet.
This might lead the consumer to apply for additional cards before the other agencies catch up and ding their report.
What Should You Do?
There are three major credit reporting bureaus. While each has different channels and criteria for documenting information, the information they utilize and provide is similar. That means that the credit score provided by one agency might be different from the one provided by another. Usually, these differences will be minor, but sometimes there can be a significant difference.
For that reason, we recommend that you get a report from all three bureaus at least once a year and more often if circumstances require closer monitoring. Each agency is required by federal law to provide you with your credit score once a year free of charge upon request.
Credit reports are easy to get, and there are plenty of services that allow you to check your credit reports on a consolidated basis.
What Credit Reporting Agency Should I Use?
Banks and other lenders choose which agency to use and often use all three agency reports when applying for a loan. If your loan request is denied, the lender must explain the denial and which credit reporting agency was utilized in making the decision.
Credit reports are easy to get. As a consumer, you can access your free annual credit reports once each year from Equifax, TransUnion, and Experian. Banks can also purchase the reports from these agencies at a small cost.
However, checking a credit score as a consumer, on the other hand, can be slightly more complicated. It seems easy to check credit scores with all the applications and websites that offer to tell you your credit score.
However, there aren’t just three credit scores out there for each consumer. Instead, there could be credit scores from each lender they have ever used. Some lenders even use custom credit scores of their own. Which creates thousands of credit score possibilities for each consumer.
Having the ability to pull these scores together to create an accurate credit picture can be difficult.
The consumer needs to be sure who they are dealing with as there are scams. The consumer must always be careful to do due diligence before giving away their personal information to obtain a credit score report.
In conclusion, the best consumer credit report agency will depend on which agency the consumer’s financial institution uses. Each financial institution chooses which reporting agency they purchase the consumer reports from, although some use all three—being aware of how the process works and how to obtain a consolidated credit score and a free annual report.
