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Why your credit score differs between Experian and Equifax

Why your credit score differs between Experian and Equifax

If you’ve ever done a deep dive into your credit history, you may have noticed your credit score may be one number with one credit bureau, and another with the next bureau.

In fact, at RateCity you can have your credit score checked in two places, but it won't always deliver the same result each time. So, it’s fair to ask yourself why this may be the case.

Two of the biggest credit reporting bureaus in Australia are Experian and Equifax. And between these two companies, it’s not uncommon to find your credit score differs significantly.

When it comes time to apply for financial products, such as a credit card or a home loan, the provider is going to request this information from one of the credit bureaus in Australia. And between Experian and Equifax, the financial provider may receive a different result that will influence your chances of approval for said product.

Let’s take a look into why your credit score may differ between Experian and Equifax, and practical steps you may take today to boost your credit score.

3 key reasons your credit score differs per credit bureau

Different algorithms

Firstly, Experian and Equifax each have their own credit reporting algorithms to interpret and quantify your personal credit history.

Unfortunately, credit bureaus do not disclose in detail how they calculate your credit score. But there is a general pattern of similar attributes both Experian and Equifax will look at, including:

  • Credit products you’ve applied for,
  • The credit limit of each product,
  • The types of credit providers that have made hard enquiries on your account, and
  • Any negative events, such as defaults.

Different time frames

Credit bureaus will generally take a snapshot of your financial data at different time frames. For this reason, your credit score may not only differ between bureaus, but change throughout a year with the one agency.

According to Experian, this is because credit bureaus take into consideration:

  1. New information provided to them
  2. Old information that has been removed from your file
  3. The age of information on your files (if a negative event occurred many years ago, it may no longer be weighted as heavily against your score)
  4. Updates to the algorithm made periodically.

Different scales

It’s also worth keeping in mind that Equifax and Experian both have different credit score scales. While Equifax grades your credit history between 0 – 1200, Experian instead grades it between 0 – 1000.

Although there is a 200 point difference between the highest scores of each bureau, Experian and Equifax still section off each individual’s credit score into five bands.

Credit score bandsEquifaxExperian
Below average0 - 5790 - 549
Average580 - 669550 - 624
Good670 - 739625 - 699
Very good740 - 799700 – 799
Excellent800 - 1200800 - 1000

Source: Equifax.com.au, Experian.com.au.

For example, if you check your credit score at these bureaus you may find that at Experian your score is 800 and with Equifax your score is 1100. These are significantly different numbers, but the key takeaway is that you sit in the excellent score band.

Credit providers will pay attention to the score band you sit in as well as the number, so if you’re nervous about one bureau reporting your number as lower due to different scales, keep this in mind.

Steps to boost your credit score

There are a few things that may negatively impact your credit score. If you have one, or many of these things in your credit history, it may be worth pausing on applying for financial products until you can boost your score:

  • Multiple credit applications in a short period of time
  • Defaults
  • Court judgements
  • Open accounts with debt collection agencies
  • Missed payments
  • Short term credit - aka payday loans
  • Bankruptcy

There are thankfully a few steps you can take today to try and bolster your credit score:

  1. Check your credit history for any mistakes, such as family members’ credit history attached to your account.
  2. Limit the amount of loan or credit card applications you make.
  3. Pay off your existing debts.
  4. Grow a healthy nest egg of savings, as this positive information may reflect in your score.
  5. Avoid late payments as best you can.

Did you find this helpful? Why not share this article?

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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