Why Do Credit Bureaus Have Different Scores?

By Tevait Feanle •  Updated: 03/18/24 •  5 min read

If your credit history is so important to your financial well-being, why does it seem like no one can decide what your credit score actually is? It’s very common to see small differences between your credit scores from different bureaus, and between those you receive directly from the bureau and those shown by third-party services like your bank app or ClearScore. Today, we are here to help you figure out why these differences happen, and what they mean for your overall creditworthiness. 

Why Do Credit Bureaus Have Different Scores?

Credit bureaus compile information about your credit history from sources like lenders, creditors, and public records. So they all use the same factors to determine your credit score, and will typically be in the same range. You won’t, for example, have a 400 score at one bureau, and an 800 at another! 

However, each bureau will prioritize data differently and will use slightly different scoring models and algorithms to interpret that data and calculate your credit score. These variations result in small differences in the scores provided by different bureaus, even when using the same credit data. So you could have a 760 score at one bureau, and a 730 at another. 

This is perfectly normal, and shouldn’t be a concern for you. As long as there is no fraud or mistake on your credit profile at one bureau that is having a large, unusual impact on your overall score, they will all give roughly the same idea of your creditworthiness. So don’t ‘sweat the small stuff’ about minimal differences!

Which Credit Bureau is the Most Accurate?

All credit bureaus are equally accurate! They just use your financial data slightly differently based on the factors that matter most to them and the lender. There is no one, true, most accurate credit score you can have. Each bureau has its own methodologies and scoring models, which yield slightly different results, but none of them are ‘wrong’. 

All reputable credit bureaus in South Africa adhere to strict industry standards and regulations to ensure the accuracy and fairness of their credit reports and scores, and even if your score is a little different between them, it will still show the same idea about how well you handle credit. 

Which Credit Bureau Do Most Lenders Use?

While there are 4 major and many minor credit bureaus lenders could use, many use only one or two as a primary source for convenience and to speed up the credit check process. In South Africa, the most commonly used credit bureaus are either TransUnion or Experian. However, this preference will vary depending on the lender’s internal policies, industry, the type of credit being sought, and many other factors.

If you take care to consult the top 4 credit bureaus regularly and monitor your credit score with them, you are highly unlikely to encounter major issues, even if a lender uses a less well-known bureau. If you are actively seeking credit from a specific lender, don’t be shy, either! You can ask them which credit bureaus they commonly use, and plan accordingly. 

Understanding Your Credit Score and How It Works

Your credit score isn’t (and shouldn’t be) a mysterious thing or some arbitrary number you are stuck with. All it is is a numerical representation of your creditworthiness. Many factors go into assembling this, especially now South African credit bureaus track both positive and negative credit behavior instead of only negative. This includes your payment history, credit utilization, length of credit history, types of credit accounts, and recent credit inquiries. Understanding how these factors influence your credit score is the key to making smart credit decisions, as well as boosting your creditworthiness over time. 

Timely payment of your bills and debts is the most crucial factor in determining your credit score. Late payments, defaults, and collections will have a significant negative impact on your score. Next, we have credit utilization. This refers to the percentage of your available credit that you’re currently using. Keeping your credit utilization ratio under 50% but above 33% will have the most positive impact on your credit score.

Other factors that matter less, but still have an impact, are the length of time you’ve used credit accounts, the types of credit you have, and any recent ‘hard’ inquiries that have been made. Generally, a longer credit history is viewed more favorably by lenders. Provided you were responsible with that credit! Having a diverse mix of credit accounts, like credit cards, loans, and mortgages, will have a small positive influence. Hard inquiries (i.e. inquiries by lenders, not you monitoring your report) will temporarily lower your credit score. This is a small impact unless you have applied for many credit lines all at once, and will quickly fall off your report. 

While it may seem strange that credit bureaus have different scores, there’s an easy explanation behind it. Now you understand more about what credit scores are, and how they impact you, you will be in a stronger position to take control of your creditworthiness. Good luck!