Why Do Credit Scores Vary From Place to Place?
A credit score measures the likelihood that a person will repay her debt. The three major credit bureaus issue credit scores for consumers. Individuals often find that their credit score differs greatly among the credit bureaus.
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Function
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Each credit reporting agency uses a different algorithm to determine a person's credit score, according to Mortgage Fit. These systems assign different point values to items on your credit report, which result in a different score.
Types
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In addition to true credit scores, the credit bureaus issue "educational scores," which are scores that give a general estimate of a person's credit rating. These scores can be significantly lower or higher than a person's true credit rating, according to USA Today.
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Considerations
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Lending agencies use true credit ratings rather than educational scores to determine a person's creditworthiness. As of September 2010, consumers are entitled to view their true credit score for free at least once a year.
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