Three Credit Scores

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Have you seen those advertisements on television where a guy is going to buy a television, only to get snubbed because one of this credit scores is vastly lower than the other two? Two of the “credit scores” look like Tom Brady while the third looks like Danny DeVito in a ski mask? The premise of the commercial is that you’ll want to use their credit score checking service because you might be at a store, ready to make a purchase, when you discover that one of your credit scores is bad and it derails the whole process.

But, how likely is that?

Three Credit Scores

You do have three credit scores. In fact, you have more than three. Since there are three credit bureaus (Experian, Equifax, TransUnion), you have three separate credit reports that should, in ideal circumstances, be identical. They each can calculate your score based on the FICO credit score formula, which are the three numbers in the commercial. They also have other scoring equations, like VantageScore and their own proprietary score. The FICO score is the one that most people care about.

Differing Scores

Now that we know you do have three scores, how likely is it that you have two correct ones and one abnormally low one? If you check your credit reports regularly and the three reports match up, this is highly unlikely. If this were to happen, the only explanation would be that something changed between the last time you checked and the day your score was pulled. The scores can differ by a few points but anything that great (the scores differ by 100+ in the commercial) is signs that one of the reports believes you have defaulted on an account or it went to a collector.

Do Creditors Pull All Three?

Rarely, if ever. If you operate off the premise that they should be similar, why would a creditor pay three agencies when they only need to pay one? Most creditors work with one bureau and rarely will they pull all three scores, it’s redundant. What this means is that even if you did have one inaccurate very low score, there’s only a 33% chance it’ll get hit. While that’s not a good reason not to use a service, it does prove that the scenario they describe in the commercial is rarer that it appears.

Do you need their service?

That’s up to you to decide but you won’t need it because you have two accurate scores and one inaccurate. As long as you keep up to date on reviewing your credit reports, you will likely never run into this scenario.

Has this ever happened to you?

{ 5 comments, please add your thoughts now! }

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5 Responses to “Three Credit Scores”

  1. ptkdude says:

    “What this means is that even if you did have one inaccurate very low score, there’s only a 33% chance it’ll get hit.”

    This statement is fundamentally inaccurate. If all potential creditors had a system whereby when pulling someone’s credit their computers pulled from the bureaus randomly, then it would be correct. But, for example, if Amex always pulls from Experian, and my Experian was my worst report, then when applying for an Amex my worst score would be pulled 100% of the time. All creditors do not select the bureau they use randomly.

  2. Richard says:

    Jim: rather than pay $3 to $4k to Re-Finance our $28k remaining mortgage & add $22k for additions & changes to our house, we plan to pay the $22k from
    Savings (earning 1% at ING). ING Direct won’t give us a refinanced mortgage; will call them later. Any ideas why ING won’t do it? too little $$ earned by them??
    2. Any suggestions how to earn $$ with my money while retired? Currently, I get 1-5% savings on credit cards with cash back & Verizon said today they would give mme $100 gift card if I buy Smartphone since my 2 yr agreement is up & have 4 yr phone. Our Scores were high in 700’s last year when we tried to sell house. Closed 3 credit cards recently & opened 1; had thought about applying for Amazon card but may wait.

  3. shiftomnimega says:

    Cap1 loves pulling all three reports.

  4. Strebkr says:

    Anytime I have bought a house or refinanced, they pull all three and take an average. 1 bad one WILL hurt you. Maybe not right away, but it will eventually.

  5. Shock says:

    Jim, I said the same thing to my wife when I saw those commercials. Rarely does one of your three credit scores vary that much from the other two.

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