Hello, everyone and welcome back to a new video shawn's, a name and credit, is the game. Today, now have you ever checked your credit karma or your credit journey, app to see what your credit score is and a bank or lender has told you it's something entirely different. Well, spoiler alert. It happens all the time when i'm working with clients - and they tell me, based on some app that their credit score is xyz.

I know that that is an okay gauge to figure out what their score actually is, but that it can pretty much fluctuate by 25 to 50 points, and today i want to break down. Why, specifically that's the case so without further ado, let's just jump right in okay. So, first of all, i just want to say real quick that i am not going to be regurgitating information that you can find elsewhere online. All right.

I am a licensed mortgage lender and i see hundreds and hundreds of credit reports every single month, so this is going to be information that i have seen first hand and i know it's frustrating. I want to sympathize with you really quick. I know that when you see a credit score on your app and you think this is what your credit score is and a lender tells you otherwise. I know it sucks.

Believe me, i've been on the short end of the stick, and i've had to be the bearer of bad news, telling someone what their actual credit score is. But i've also been kind of the good news guy by telling someone that it's actually higher than what their apps are saying. It goes both ways, but first thing in this. Video that i want to explain is why your credit score varies from bureau to bureau.

So equifax, transunion and experian, and then once i kind of break down why it can vary between the different bureaus you'll, get a better understanding as to why it's going to vary based on the app on your phone and what a lender actually sees. Oh and i want to say that your scores between bureaus are almost never going to be the exact same score. I've probably seen over 5 000 credit reports at this point and one person out of all of those credit reports has had the exact same score on every single bureau. It's incredibly rare and here's the three reasons why so one they are three entirely separate companies, slash entities and no, they are not run by the government.

Now, yes, they do have laws and regulations that are set by the government that they all have to follow and abide by, but they do not communicate with each other at all. It's as if they're mcdonald's, uh, wendy's and burger king okay, they all serve you fast food and they all have to abide by fda guidelines, but all three of their burgers are going to be different from the next reason. Being brings me to my number. Two point is the fact that they all have different scoring modules or algorithms for scoring individuals, so the computations and the weights that each credit bureau puts on certain aspects on a credit report are going to vary um depending on the company.

So, for example, if you had a late payment - and it is your first late payment - okay experian might be like oh yeah, late payments really bad. Your score's gon na go down 40 points, but transunion and equifax might say you know what it's your first late payment ever and because of that, it's only going to drop 20 to 25 points because their algorithms and their computations are going to be a little less Lenient actually they'd be more lenient right because they'd be less strict english. Never my strong suit, always math, but that's just one example and remember that your credit report is comprised of so many different data points and every single company is going to vary tremendously on how they weight each one of those data points which brings me to my Third point is the fact that each credit bureau is getting different bits of data now some trade lines aka, you know credit cards and car loans and whatever else you got on there, some of them are only going to be reporting to some of the bureaus, because It's very expensive to report to all three bureaus when you have millions of trade lines out there and millions of people that you're lending to so some companies are only going to report certain things to certain credit bureaus to save them money so to keep costs down And you see this a lot with collections and i'll explain why in just a second but to keep the costs down, some of these companies are going to say. You know what, instead of paying to report every 30 days to all three bureaus, we're just going to report to two of them or we're just going to report to one of them and the reasoning collections are so popular to only be shown on one bureau.

Sometimes two is the fact that that collection agency doesn't want to spend more money than they need to on you, because if you have something in collections, you're probably not going to pay them. And if you do it's going to be a lot of work and a lot of money for them to get you to pay them, so they need to be saving money and cutting costs and the way they're able to do that is by only reporting it to One or two of the bureaus, because they know if they report it to one of the bureaus they got you you have that debt on your record, even though it's only reporting on one bureau, you have to address it to improve your score or to get that Removed from your name so they're not going to waste money, reporting it to all three bureaus now, it's not always the case, but this is what happens more likely than not. So if you have something where your experience score is far lower than your other two. It's most likely because experian has an old collection that the other two bureaus don't have data on okay.

So that's the quick and dirty as to why your scores are going to vary depending on the bureau and unless you have something kind of big and detrimental. Like a collection, most of the time, your your scores between each bureau is only going to be varying by about 15 points. Okay, but there's another twist to this, so some lenders might only use one or two of the bureaus. They might not be using your fico credit score now, if you're a long time viewer on this channel hint hint.

You should definitely hit that subscribe button right now and hit the bell, but if you're a long time viewer on this channel, you know that your fico credit score is the median score of the three between transunion equifax and experience. So some lenders are going to require your fico credit score and some lenders are just going to require your credit score, which could be just one of the bureaus and let me explain the fico credit score real quick. So if your equifax is a 700, your experian is a 730 and your transunion's a 720.. That 720 is the score that's in between the other two, so your fico credit score is gon na, be that 720.

and i'll tell you that every single mortgage lender is using your fico credit score. It is required by law to use your fico credit score. However, when it comes to car loans or maybe even some credit cards, they might only be using one of the bureaus, and why is that? Well, as i mentioned earlier, not only is it expensive to report to all three bureaus every 30 days, but it's also expensive to get a credit report from all three bureaus. So if i were to pull a single bureau credit report, so if i only wanted to see experian, it probably cost me 15, but the fact that i have to get all three on a single report that try merge report is going to cost me about 35.

So most of time lenders will go man if we're going to be pulling 25 000 credit reports in a month to see you know people when they come in and they want to buy their their cars crap. We can't really afford to spend 35 dollars that much. If someone's not even gon na, buy a car, so let's go ahead and just check one of them and pay that 15. Every time someone wants to buy a car and then they're only going to be using that credit score when they kind of negotiate terms with you.

So that makes things a little challenging to you as the consumer, because you have to be asking the right questions. If a lender or someone says hey, your credit score, is a 720 you're going to want to ask hey? Is that a try, merge or a fico credit score, or is that just one of the bureaus and at the end of this video i'm going to show you how i actually know an accurate fico credit score for myself every single day? But okay, now that we know all that information about the differing in scores between bureaus, the differing in scores between lenders, potentially now, let's talk about how scores can actually differ when it comes to what you see on your app and versus what a lender actually sees When they pull an actual report - and the first thing you're going to want to check - is your app to start and go. Okay is credit, karma or credit journey or whatever you're using? Is it actually reporting all three bureaus or is it just showing you one? That's the first and easiest thing to check for, but let's say it is showing all three bureaus which is actually pretty rare, but let's say it's showing all three bureaus and it's actually your fico credit score. Well, here's the problem we end up running into those apps.

Aren't gon na have the same information that the credit bureaus have plus they're, not going to be synced up time wise that the credit bureaus are so, for example, some collections and some major delinquencies will not show up on your credit card or credit journey or whatever You're using plus, to even add to that is the fact that personal old, personal information old addresses old names of yours, all that kind of personal information that doesn't necessarily rely on trade lines, but it's still on a full credit report. Those apps that you have on your phone is not going to have all that information on there. So if you've had a lot of maiden names or you've had a lot of old addresses - or you just have a lot of old information on your report, that could drag your score down a bunch and these apps aren't going to pick up that information. So that's big problem number one and the secondary big problem that you're gon na have is gon na, be the time sink and how we're always playing this game of cat and mouse.

And let me give you a real life example. So let's say you pay down your chase credit card right now. You just went on your phone, you paid it down. The payment went through and chase has a an app called credit journey.

It's within your app. I actually have a chase credit card or backed by chase, so i know that it's credit journey in there. Let's say you look at your credit journey and, let's say credit journey was reporting all three bureaus which it doesn't. Let's say it was reporting all three bureaus when you make that payment on that credit card.

It knows you just made that payment, and so it knows that your credit utilization is far lower, which is gon na shoot. Your score up immediately. It's gon na literally be like hey. You just made this payment yesterday.

Your score just went up 15 points. However, if i were to check your score that day, i'm not going to see that updated balance because chase is only going to be reporting to the credit bureaus once every 30 days and if they just reported the day before. That means we got ta wait 30 days for me to actually see it on mayan. Remember it's expensive to constantly update and report this information and it sucks even more because not only does it take chase a while to update the bureaus, but if anything were to be updated with the bureaus on that day, chase is going to take a while to Actually get that information as well.

So, for example, if you got a collection on your report, oh crap, you got a collection that was put on. That collection agency is going to report it the day it becomes a collection, so they're literally going to be like hey, experian, hey transunion, hey equifax, there's a collection on joe simoes credit report, put it on their report right now, they're going to put on your report Right then, and there, but chase is only going to be basically pinging. The credit bureaus once every 30 days, so i'm gon na see on your report immediately that hey you have a collection. This is what dropped your score, but the apps and and kind of chase and credit journey, and all that stuff they're not going to get that information for potentially another 30 days.

And this can happen whether it's something good or something bad. A new trade line - or maybe you got some new kind of payment history on there. Those apps aren't going to be getting that information until every cycle. I know you're probably sitting there going like this - is the oldest way of doing things and the technology is literally like in the prehistoric age.

It's terrible, i know believe me, i'm right there with you. Hopefully, something in the future, maybe like along the lines of the technology with cryptocurrency and blockchain, that we can kind of speed this kind of communication up so everyone's on the same page way sooner, because right now it takes forever for things to update across all platforms. Now not all is lost, though, depending on your situation, we can get things updated immediately. So if you did pay down that balance - and it's not reflecting on my side just yet, we could get it reflected and updated immediately.

It's called a rapid rescore. It does cost money to do. Of course everything costs money these days, but it doesn't necessarily happen with everything it's used mainly for just paid down balances. You can use it on other updates to your credit report, but it has to be documented pretty much perfectly and it's a lot more challenging and again it is expensive.

So it's really only used when you absolutely need to do it and, like you know, are willing to pay the money to do it. Okay, so i think that's pretty much all the information on why your scores can differ between credit bureaus and maybe different services and platforms and lenders and user interfaces, and all that jargon and it's incredibly challenging to know what your exact credit score is at any. Given time, which is why i use something called my score iq, it is a platform i'll leave it linked down below it's a platform that allows you to see your most accurate and up-to-date credit report that the credit bureaus are seeing and also what lenders are seeing. So you know exactly what your score is all the time and now that you know how all this communication kind of works a service like this essentially is going to be pinging.

The credit bureaus and pinging your specific profile every single day. It's checking for new trade lines, new, updated information collections, literally anything that would show up on your credit report. It is pinging and checking for every single day and, as i mentioned throughout this video that doesn't come free, so it does cost. It is a monthly cost to do it.

I think it's super cheap for what you get out of it. I'm saving so much money in the long run by knowing exactly what my credit score is. Maybe even if i've got any like identity fraud going on, i'm gon na know literally instantly. I'm not gon na have to wait 30 to 60 to 90 days to see if something reports on my report - maybe i don't know about it, just absolutely trash.

My credit. No, i'm not willing to risk that so um. I think it's super affordable and really cheap to have that information and i'm gon na be saving so much money in the long run. Like i just mentioned my interest rate on any loan that i'm gon na get is gon na be the best, because i know exactly what my credit score is, but again there's a link down below.

If you use the link in the description, you actually get a nice little promo discount, so you're welcome, but yeah. That's just kind of my two cents on how your scores can differ and why it's so important to actually know what your scores are. So i've got tons of other really great information on credit on this channel, so i highly recommend check out the playlist link down below or just subscribe for, more content on this channel. I'm always trying to release some good information to kind of help you out.

So i hope you enjoyed the video if you did i'd, really appreciate and hit that like button. As always, you know leave me a comment down below and i will see you in the next video you.