Perhaps you recently got your credit score from more than one credit bureau or credit bureau partner. But you also noticed that it differs from one credit bureau to another. Why does it differ? Don’t they all keep the same information? Is this some mistake?
No, it’s not a mistake and it can be very confusing to understand what’s happening! Let us help you to understand why your credit score differs when compared to other credit bureaus by first explaining where you are getting your credit score.
Who are the Largest Credit Bureaus in South Africa?
South Africa is making waves in the online business world. So it’s no wonder we have top-notch digital service providers.
Credit bureaus have an important role. They need to track, store, and provide credit reports of every person they can find in South Africa. They also provide a whole host of other services as well. But with this service, they help the credit market of South Africa to provide financial products more responsibly. The four largest credit bureaus in South Africa are.
What Information Do They Store About Me?
Credit bureaus store the details about your financial history. Every time you apply for credit it gets logged on your report. Every account you open and every Rand you owe to lenders show up on your credit report.
The credit bureaus then use your report to determine your credit score. Your credit report holds different kinds of information that counts towards your score. The bureaus apply their calculations and calculate your credit score.
But Why Does It Differ When Compared to Other Credit Bureaus?
Each credit bureau has its way of doing things. They follow the same rules and guidelines as set out by the NCR (National Credit Regulator). But they have their own way of interpreting your information. One credit bureau may regard a specific detail with more concern. They apply different calculations and will come to different credit scores for the same person.
The lenders who have given you finance, for example, need to report your credit transactions to the credit bureaus. But, sometimes they only report it to certain credit bureaus. Therefore, the credit bureaus may have different information about you. So credit bureaus will give you different credit scores, especially when they have different sets of information about you.
Which Credit Score Do I Believe?
So we’ve established why your credit score differs from one credit bureau to another. But which one do you believe? Which score do you use to determine your credit health?
You can’t just take one credit score as the truth. You need to use the combined results of more than one credit score. Remember some lenders only report to certain credit bureaus. Your average credit score as reported by all 4 credit bureaus is a better representation of your credit health.
Check Your Credit Report for Mistakes
This is one of the reasons why you need to know your credit score from multiple credit bureaus. Sometimes things are logged on your credit report which is false. Lenders may have accidentally listed an account of yours as outstanding. But you might have actually settled the account.
It’s surprising how many Fincheck users complain of incorrect information on their report! This is why places like Kudough offer a free credit report. You will also be able to purchase your full credit report from some of the best credit bureaus in South Africa right from your dashboard!
Remember, false information can lower your credit score. A lower score will make your future applications for credit much harder. Take the time to study your credit reports so you can make better financial decisions!
Conclusion Your credit score will differ from one credit bureau to another. The credit bureaus often hold different sets of information about your credit report. They also don’t use the exact same calculation methods, so it’s important to get your report from different credit bureaus and make your next application a wise decision!