Reasons For Different Credit Scores
There are three major credit reporting bureaus in Australia – Equifax (previously Veda), Illion (previously Dun & Bradstreet) and Experian – all have different credit scores for individuals.
Credit scores can sometimes be a little confusing for would-be borrowers, particularly because they can vary depending on which organisation is providing them.
Whilst each credit bureau collects roughly the same type of information – everything from previous applications for finance and important information like defaults and bankruptcies – the way they interpret this data will vary.
Each bureau has their own way in which they collate and rank data to ultimately come up with a ‘score’, which is their representation of how creditworthy a person might be.
Sources & Timeframes
Historically financial institutions have not had to report customer enquiries to all credit reporting bureaus – so while one bureau may have known about a particular transaction, others may have no knowledge of it – and even when it was shared, timings and delays could be substantially different.
Algorithms & Interpretation
Even with the same data, each credit reporting bureau have their own proprietary algorithms which calculates different weighting to different financial actions and information, based on what their analysis tools consider to be high or low risk.
As well as potentially different data, and interpretations, the CRBs also set scores within different ranges representing different risk ratings, and are therefore not directly comparable.
Are different credit scores an issue?
The difference in scores is not something to be concerned about, and they should generally fall into a similar band.
If they do not, then there may be something adverse going on – such as a default you are unaware of, or it could just be that you haven’t been active in finance for long (this is usually the case if you are under 25, or new to Australia).
So is WisrCredit providing a credit score?
No. WisrCredit is a free service that looks to provide you with your credit scores from two major credit reporting bureaus in Australia (Equifax and Experian). These individual credit scores provide an indication of your overall financial credit health, to keep you well informed about your creditworthiness.
Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Finance Pty Ltd does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.