Thinking about applying for a loan but don’t know about credit score and credit reports? If not, don’t worry. In this comparative article on TransUnion vs. Equifax, you’ll get all answers to your queries. So, keep reading the article till the end.
We know that applying for a loan and getting it approved by a lender is not easy. The tricky thing is that you can’t get a loan quickly if your credit score and reports aren’t that good.
Another problem is that three credit bureaus (TransUnion, Equifax, Experian) create reports. The data of those reports is calculated into a number we call credit score. As a result, picking reliable reports from various sources may become challenging.
It’s all Greek to you, right. You might be thinking of these questions. Which report is a better bet between TransUnion and Equifax, and which credit score is more accurate? But don’t worry. Here is the guide to clear your mind; let’s start with the overview.
TransUnion Vs. Equifax: Overview
Here comes the essential point: what is the difference between Equifax and TransUnion? Ever wonder why a lender will trust a report? Why is it so important? Does a lender give money to the borrower who has a good report?
As mentioned above, three companies or credit bureaus (TransUnion, Equifax, Experian) collect your data. They offer information regarding your account, previous loan, and payment history and create reports for the banks and lenders.
An excellent report defines your history related to your account, bills, credit card, etc. If you have a perfect record, it means you pay your bills on time and don’t have any dues. So, your report will be more acceptable than the bad one, and the lender will trust you more.
In contrast, if you have a bad history, you can’t get a loan quickly. Below we’ll explain the two big credit bureaus, TransUnion and Equifax.
TransUnion is an American credit bureau company. It collects your account data, personal information, credit history, balance, and other history related to payment and creates a report. The report also shows the employment history, like the day you join, your position, etc.
Equifax is one of the big credit bureaus. The report of Equifax is easy to read; a lender can easily learn about the borrower’s loan history. It also signifies the month of late payment. Other than that, the report concludes your personal, credit history, balance, and bankruptcy information.
Why Are They Different?
When all credit bureaus collect the exact account data, then why do you get different scores? As previously mentioned, there are various credit bureaus, and they work differently. Although all credit bureaus used the same data, there are still some differences.
For example, if one credit bureau has unique information about you and another bureau does not, your report will differ. Just like TransUnion shows employment data specifically in its reports while others don’t. These slight differences in reports cause variations in the score.
Which Credit Score Is More Accurate?
The data of credit reports get calculated into a number which we call credit score. Keep in mind that the two best companies generate credit scores. The first one is FICO (the fair Isaac corporation), and the second is the Vantage score.
Your FICO and Vantage scores are not identical because the way of calculation is different. Remember that your credit score is based on credit report data. FICO and VantageScore differ based on how much and which type of information is used.
How Are FICO Scores and Vantage Scores Calculated?
This is the data of your credit report that is used to calculate the FICO and Vantage score. Below you can see which data is highly influential or less influential for both scores.
|Extremely Influential||The first information that matters most is your payment history.||Payment history of your credit account|
|Highly Influential||The second important thing is your dues and credit utilization||The credit limit of your account and credit utilization|
The credit mix (the details of loan and credit cards) and credit history length
|Moderately Influential||The third is your credit history||Your previous dues|
|Less Influential||The fourth is Credit mix, your loans, credit cards.|
The fifth is the data of your new credit account
|The available credit of your account|
As you can see the difference above, the highly influential information like dues for FICO is moderately significant for Vantage. The credit mix that is 10% important for FICO is highly effective for Vantage.
So, in the end, both scores (FICO and Vantage) are accurate according to their data. You can rely on the calculated reports with complete confidence.
Which Credit Score Is Essential For Loan Applications?
So, which credit score do you need for a loan application? Credit scores of FICO and Vantage (version 3.0 and 4.0) use a score range of 300 – 850.
|300 to 499||Poor||Poor|
|500 to 600||Average||Average|
|601 to 660||Good||Good|
|661 to 780||Prime||Prime|
|781 to 850||Exceptional||Exceptional|
As you can see, the high score qualifies for the best category, while the low score does not. In short, a high score (above 600) is good to get a loan. After all, a lender can easily trust a person who has a high credit score.
How to Check Credit Score
In the financial sector, checking your credit score is necessary for opening up several opportunities. By using TransUnion and Equifax, you can get your credit reports. So, let’s discuss each one separately and how you can check your credit score with them.
You can purchase the subscription of TransUnion and can check credit reports and credit scores whenever you want.
You can buy credit scores from Equifax. If you want, you can pay for the monthly monitoring subscription that allows you to check your credit score at any time.
The Difference In Credit Score Is A Warning?
If your credit score of FICO and Vantage Care differs, then don’t be too worried about it. It’s normal to have a slight difference in credit score. However, check the report and ensure that your account information and data are accurate if you think there is a notable difference.
Frequently Asked Questions (FAQs)
Do lenders look at Equifax or TransUnion?
Yes, lenders look at credit reports. However, it is not confirmed which company report they used, whether it is Equifax or TransUnion.
Which credit report is most accurate?
All reports are accurate, whether it is from TransUnion or Equifax. Because no credit bureau is more important than another, though most lenders prefer the report and score of one bureau over others, it does not mean the other bureau report is not accurate.
What is the difference between TransUnion and Equifax?
TransUnion and Equifax are both credit bureaus. They both collect the data of creditors and provide it to banks and lenders.
So, a lender can decide whether a borrower is trustworthy or not for the loan. The only difference is TransUnion shows data about employment history in the report while Equifax does not.
What lenders use Equifax only?
There is no accurate answer to what lenders use Equifax reports. The choice of the credit report depends upon what the lender prefers. However, the PenFed Credit Union Company uses the Equifax report.
What lenders use TransUnion only?
It depends on which lender report they want to see. However, many loan companies only used TransUnion reports like Prosper, Upgrade, Barclays, Alliant Credit Unions, etc.
Final Remarks: TransUnion Vs. Equifax
Make sure to check the credit score and read the credit report monthly. It is good to keep a track record of your credit account. Also, all three credit bureaus, including TransUnion and Equifax, offer a credit report once a week.You can comment down below if you’ve any questions regarding TransUnion vs. Equifax. We would love to answer you.