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Module 3: Why are my credit scores different?

Introduction

In Australia, you have three different credit scores. If you’ve logged into your Tippla account, where you can see your Equifax and Experian credit scores, you might have noticed that they are different.

You might be wondering whether this is a mistake, that something is wrong. In fact, having two different credit scores is perfectly normal! Let’s find out why.

Why are my credit scores different?

There can be a number of reasons as to why your credit scores differ across the bureaus. Some of these reasons might be due to your own personal circumstances. However, there are three main reasons why credit scores can be different for everyone.

Equifax, Experian and illion use different scales 

As we mentioned above, the different credit bureaus use different scales to measure your credit score. Equifax uses a scale of 0 -1,200, whereas Experian and illion’s scales range from 0 – 1,000.

Therefore, because your Equifax credit score is based on a different scale, it’s likely that your Equifax credit score will be different from your Experian and illion credit scores.

Furthermore, the three CRAs all categorise your credit scores differently. Specifically, a good credit score for Equifax is 622 – 725. Anything less than this is either average or below average. Experian, on the other hand, classifies 625 – 699 as a good credit score, and illion categorises a score falling between 700 – 799 as good.

They use different algorithms to calculate your credit score

The exact algorithms each of the credit bureaus use to calculate your credit score is a well-guarded secret. Unfortunately, we don’t know the exact algorithm they use. 

In Australia, the credit bureaus determine what counts the most towards your score, and how much weight each of these items have. This, coupled with the fact that they each use their own algorithm, is another likely reason why your credit scores could be different.

Not all lenders and banks report to all credit bureaus

Your credit report is based on the information the CRAs receive from credit providers. Each month, credit providers such as banks, lenders and utility providers, report to the credit reporting agencies. However, they don’t necessarily report to each one. 

If you only have one form of credit, or don’t have any credit at all, then it’s likely that one credit bureau might have some information, whilst another might have different information or none at all.