Equifax and Experian are two of the three major consumer credit bureaus in the United States. The third is TransUnion. Credit bureaus collect data from creditors and lenders to create credit reports and scores. These are used by businesses to assess the creditworthiness of customers.
Key Differences Between Equifax and Experian
There are some key differences between Equifax and Experian:
- History: Equifax was founded in 1899 and is headquartered in Atlanta. Experian was founded in 1996 and is headquartered in Dublin, Ireland.
- Credit scoring models: Equifax uses the Equifax Credit Score while Experian uses the FICO Score.
- Data collection: Equifax purchases data from banks and financial institutions. Experian collects data directly from consumers.
- Database: Equifax has a more comprehensive database of credit information.
- Accuracy: Experian is considered more proactive in investigating and resolving errors on reports.
Lending Decisions
Do lenders look at Equifax or Experian?
The most widely used scoring model, the FICO® Score, is used in 90% of lending decisions. In addition to the general FICO® 8 model, specific FICO scores are used when you apply for a mortgage: FICO® Score 2 (Experian), FICO® Score 5 (Equifax), and FICO® Score 4 (TransUnion).
Most mortgage lenders will use all three credit bureaus. A mortgage broker could potentially help you find one that only uses Experian or Equifax.
Keeping Credit Scores Strong
Your Experian score may be higher than your Equifax score because of different scoring methodologies and data sources. More companies use Experian reports, but you likely will not know which bureau a lender uses. It’s important to keep all three credit scores strong when applying for loans. Check free annual credit reports from each bureau to monitor changes and compare debts listed across bureaus, as issues may appear on only one report.