If you’ve ever applied for a credit card, car loan, or mortgage, then you probably wondered which credit report the lender would look at. The short version is most lenders use Experian, but not always. In reality, Experian is the most commonly used reporting bureau for lenders making lending decisions. This will help you make better decisions about managing your credit.
The three bureaus are not the same
The three main credit reporting agencies (CRAs), namely Experian, TransUnion, and Equifax, provide similar services; they do not operate equally. In theory, each CRA collects information from lenders regarding consumers’ financial transactions and creates a credit report based on this information. However, in reality, each CRA provides a slightly different service depending on who is using their product. As such, many lenders prefer one CRA over another.
Experian currently has the largest amount of data furnishers reporting to them compared to either TransUnion or Equifax. Therefore, Experian reports are generally considered to contain more comprehensive and reliable information for making lending decisions. Additionally, Experian is typically preferred by a large number of credit card issuers, auto lenders and personal loan providers.
TransUnion tends to be used by landlords, telecommunications companies and a select few auto lenders. Equifax is usually preferred by mortgage lenders alongside Experian, however is frequently utilized in various regions of the country more than in other areas.
What this means when you apply for credit
Experian credit reports are often used by lenders during the loan application process. There are several implications related to the use of these reports:
Firstly, errors on your Experian report that do not show up on your TransUnion and/or Equifax reports will be visible to the lender evaluating your application. Assuming that all three reports are accurate, and only monitoring one bureau, can leave you blindsided. Errors such as: late payments or collections that should not be reported on your Experian file may result in denial or higher interest rates, regardless of how good your other reports are.
Secondly, it is possible to have accounts that only report to one or two of the major bureaus. Therefore, while your Experian report may be thin compared to your TransUnion and/or Equifax reports (or vice versa), knowing which accounts are reporting to each of the bureaus provides you with a better understanding of what the lender’s view is.
Lastly, any improvements made to your credit will only affect a lender’s decision if those changes are recorded in the bureau that the lender pulled for their review. For example, adding positive credit history that is only reflected in your TransUnion report will be irrelevant if the lender reviewing your credit pulled your Experian report.
Experian and rent reporting
The most significant aspect of Experian’s influence on renters comes down to how Experian’s influence relates to rent reporting. When renters submit reports on their rent payments to Experian (via services such as Credit Genius), these reported payments will then be included in the file used by many of the lenders that will review them. This is a meaningful difference.
Rent payments submitted to a credit reporting agency that few lenders access are almost useless for renters applying for credit. Rent payments submitted to Experian provide the opportunity for the renter to have this positive payment history included in the file accessed by the decision-makers at lending institutions. Therefore, one important consideration for renters who are attempting to create or enhance their credit profiles is ensuring that the historical data included in their Experian file is accurate.
Why your Experian score might be different from the others
Due to differences in the data available at each credit reporting bureau, it is possible that your Experian credit score could be higher or lower than your Equifax or TransUnion credit score. The primary reasons for differing credit scores include:
Accounts that report to some credit reporting agencies, but do not report to others,
Hard inquiries from loan applications that only appear at the bureau selected by the lender,
Timing differences in when information is updated across the three separate credit files.
If your Experian credit score is lower than your Equifax and/or TransUnion credit scores, consider ordering a full copy of your Experian report. A review of your report may indicate whether there is a negative account reporting on your Experian file which does not appear on either of your other two credit files, or if there is a positive account that you have had open during the past year and reporting positively on both Equifax and TransUnion files, but is not being reported on your Experian file.
How to monitor your Experian file specifically
Since Experian is often used in a lender’s credit check, keeping track of your Experian credit file in real time will probably be much more practical for you than using a generic credit monitoring service without specifying which credit bureau they are tracking.
Using Credit Genius’s real-time Experian credit monitoring service allows you to see all updates to your Experian credit file. Any time something occurs on your Experian credit file (new account, new inquiry, a payment made or missed), you will receive an immediate notification via email. The ability to receive these notifications before applying for credit is especially important during those last few weeks prior to making a credit request when you want to ensure your Experian credit report accurately reflects all the work you have put into improving your credit file and ensuring there are no issues on your Experian credit report.
The bottom line
While not the only bureau that matters, Experian is almost always the primary bureau upon which lenders rely. Therefore, knowing this fact should impact how you think about your credit file. In other words, keep your Experian report clean. Ensure that all of your positive accounts are showing up on your Experian report. First, dispute any errors you find on your Experian report. Lastly, ensure that any credit-building activities you pursue are reflected on the versions of your credit report that lenders use.
Ultimately, the usefulness of your credit score is directly tied to which version of your credit report lenders check. For most individuals, most of the time, that version is located at Experian.
