TransUnion vs. Equifax: Understanding the Differences

Two of the biggest players in the game that can help give you a clearer understanding of your credit are TransUnion and Equifax. These credit bureaus (and one other - Experian) gather information from lenders, utility companies, and various other sources to create credit reports and calculate your three-digit credit score that is used by lenders to determine your creditworthiness. 

While both companies gather similar information, they use different scoring models, which can cause variations in your scores.

Let’s take a look at TransUnion vs. Equifax to understand their many similarities and their few differences. 

Highlights/Key Takeaways

• Equifax and TransUnion are two of the three credit reporting agencies in the U.S., and both provide credit reports and scores to millions of consumers.
• No one credit bureau is more important than another as lenders look at scores from all three bureaus when making their lending decisions. 
• No one credit bureau is considered to be more accurate than the other. Both TransUnion and Equifax have their own strengths.

What Are the Main Differences Between Equifax and TransUnion?

There’s not just one difference between TransUnion and Equifax. Here’s a table that compares each bureau side-by-side. 

Equifax

Equifax is the older of the two companies, founded back in 1899. The company's original focus was collecting credit information for local merchants and business owners, but it expanded to provide credit reports for a wider range of businesses and eventually individual consumers.

Today, Equifax collects and analyzes data on over 800 million consumers. This data helps lenders offer the right loans to consumers. Its scores range from 300 to 850, and look like so:

• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

Equifax offers a huge list of features and plan options, including:

• Equifax Complete Family Plan: You’ll pay $29.95/month and you’ll get credit monitoring and ID theft protection for you and up to four family members. 
• Equifax Complete: For $9.9f/month, you’ll get daily access to your credit reports and credit scores. Plus, you’ll also have basic credit monitoring and credit alerts.
• Equifax Complete Premier: If you’re looking for advanced credit monitoring such as alerts for changes to any of your credit limits, new accounts, or addresses in your name.  
• Equifax ID Patrol: This is Equifax’s ID protection option that’s $16.95/month. You’ll have the ability to lock your credit whenever you need to, plus you’ll get a dark web WebScan, fraud alerts, and more. 
• Equifax Credit Monitor: For $4.95/month, you’ll get just credit monitoring and credit alerts, as well as limited access to your credit scores and reports.
• Equifax Core Credit: Equifax’s free product provides you with credit reports and scores from all three major credit bureaus.

What You’ll See on Your Equifax Credit Reports

When you get your report in hand (or virtually), you’ll find the following information on it:

• Personal information: SSN, address, and date of birth. 
• Account information: Any lenders that report your accounts to Equifax will show up and include information about each account. 
• Inquiry information: Both "soft" and "hard" inquiries will be listed. 
• Bankruptcies: These are public records and will be listed on your score for years after you’ve filed.  
• Collections accounts: These include past-due accounts that have been sent to collections.

TransUnion  

TransUnion was founded in the 1960s by the railcar leasing operation, Union Tank Car Company. Although the company got its start years after Equifax, it hasn’t had too hard a time catching up, with 166 million customers in the U.S. alone. 

TransUnion’s credit score ranking system is slightly different from Equifax, breaking down credit scores even further:

• Very poor: 300 to 600
• Poor: 601 to 660
• Fair: 661 to 720
• Good: 721 to 780
• Excellent: 781 to 850

TransUnion also offers its own suite of products, plans, and services:

• Credit monitoring: At $29.95/month, TransUnion’s credit monitoring services help customers keep track of their credit reports and scores. Plus, it alerts you to any sudden changes to your credit reports.
• Credit protection: For credit protection, TransUnion offers a $29.95/month plan that sends you instant email alerts if your credit suddenly changes.
• Score simulator: TransUnion has a score simulator that lets you see how different money moves like opening a new account or paying down debt can change your score.
• Free credit report: TransUnion provides consumers with a free copy of their credit report once a year (as well as weekly reports and others for purchase).
• Dispute credit report: You can dispute any errors or inaccuracies easily through the site.
• Fraud alert: If there’s fraudulent activity detected on your credit report, TransUnion will send you email notifications.
• Active duty credit monitoring: For active-duty military members, TransUnion offers credit monitoring.
• TrueIdentity: TransUnion's TrueIdentity service not only provides free identity theft protection but includes $25,000 in ID theft insurance as well. 

What You’ll See on Your TransUnion Credit Reports

TranUnion’s reports will look fairly similar to Equifax, and includes the following information:

• Identifying information
• Public records
• Collections accounts
• Credit/account history
• Inquiries

Your Credit Score with Equifax and TransUnion

Your credit score is simply a numerical representation of what’s reflected on your credit report. It’s used predominantly by lenders to determine whether or not you're eligible for credit or loan products. Both Equifax and TransUnion calculate your credit score using a formula that takes into account various factors such as your:

• Payment history
• Credit utilization
• Length of credit history
• Types of credit accounts

That said, there are a few reasons you may have a different credit score with Equifax and TransUnion.  

1. Not all lenders report to both credit bureaus: This means that one credit bureau may have more information about your credit history than the other, leading to slightly different scores. 
2. The credit scoring models used by Equifax and TransUnion weigh certain factors differently: For example, one credit bureau may place more importance on your payment history, while the other may give more weight to your credit utilization.  
3. There may be errors on your credit report: These errors may only be on one report, leading to varying scores.

Transunion vs. Equifax for Mortgages

When it comes to obtaining a mortgage, lenders will typically pull your credit report and credit score from all three major credit bureaus. There’s a lot of money on the line, so they want to be as thorough as possible. Some of these lenders may rely more heavily on one credit bureau than the others.

Generally, mortgage lenders will look at specific FICO score models through each lender. Here are the different FICO scores lenders will pull:

• FICO Score 2 (Experian)
• FICO Score 5 (Equifax)
• FICO Score 4 (TransUnion)

Transunion vs. Equifax: Which Credit Bureau Do Lenders Use? 

As a consumer, it's natural to want to know which credit bureau a lender will use when evaluating your creditworthiness. Unfortunately, lenders aren’t obligated to disclose which credit bureau they’ll use to pull your credit report and score. That’s a business decision on their end. 

When you apply for credit, the lender will typically request your credit report and score from one or more of the three major credit bureaus. Again, that’s a business decision that their internal team will make. 

If you're applying for credit and want to know which credit bureau a lender may use, you can always ask the lender directly, just know it may not want to (or have to) disclose this information. 

Is TransUnion or Equifax More Accurate? 

Both Equifax and TransUnion are well-established, reputable credit bureaus that provide accurate and reliable information to lenders and consumers alike. Currently, no one credit bureau is considered to be more accurate than the other. That said, both TransUnion and Equifax have their own strengths.

TransUnion’s Strengths

• Offers a variety of personalized credit monitoring services that can alert you to any changes in your credit report or score.
• Provides detailed credit reports that include easy-to-ready information on all of your accounts, your payment history, and more.
• Has a user-friendly website that makes it easy to navigate and find the information you need.
• Offers a mobile app that allows you to access your credit report and score on the go.

Equifax’s Strengths

• Offers comprehensive identity protection services that can help protect you from fraud and identity theft.
• Provides credit reports and scores that are widely used by lenders, making them a good resource for understanding how potential lenders view your creditworthiness.
• Has a strong focus on data security and has made significant investments in cybersecurity measures to protect customer data.
• Provides a wealth of educational resources and tools to help consumers better understand credit and finances.

How to Manage Your Credit 

Managing your credit is an essential part of maintaining a healthy financial life. It’s the only way you can get approved for the best credit cards, low interest loans, and even apartments or jobs. To manage your credit effectively, make sure you’re doing the following:

• Monitoring your credit reports regularly from all three major credit bureaus so you can identify any errors or discrepancies that may be impacting your credit score. You can find Equifax’s free credit report option here and you can find TransUnion’s here. 
• Make payments on time as late payments can have a negative impact on your credit score. 
• Keep your credit utilization low, below 30%, if possible. 
• Limit new credit applications. Applying for too much credit at once can be seen as a red flag by lenders and can negatively impact your credit score. 
• Address any errors or inaccuracies by contacting the credit bureau and the creditor reporting the error to dispute the information.

When to Contact the Credit Bureaus

If you notice any errors or inaccuracies on your credit report, you should contact the credit bureaus right away to dispute the information. Here are a few situations when you may need to contact the credit bureaus:

• Incorrect personal information: If you notice that your name, address, or other personal information is incorrect on your credit report, you’ll want to contact the credit bureau to have it corrected.
• Accounts that don't belong to you: If you see accounts on your credit report that you never opened, this could be a sign of identity theft or fraud and you should contact the bureaus immediately. Make sure to contact the lender or bank that opened the account and tell them this may be a case of fraud.  
• Late payments that you believe are incorrect: If you see late payments on your credit report that you believe are incorrect, contact the creditor to dispute the information. 
• Inaccurate account balances: If you see account balances on your credit report that are incorrect, have them corrected as inaccurate balances can impact your credit utilization and credit score.

If you find an error on your Equifax report, here’s how to contact them. And here’s how to contact TranUnion. 

How to Improve Your Credit 

Improving your credit takes time, but by following a few simple steps, you can watch your score start to inch up.

• Always make on-time payments: Payment history is the most important factor in your credit score, so make sure you're always making at least the minimum payment on time for all of your credit accounts.
• Catch up on any late payments before 30 days: Late payments can have a negative impact on your credit score, but lenders don’t dock your score immediately. You usually have 30 days to avoid having it reported to the credit bureaus.
• Pay down your debt: Try to pay down your balances as much as possible, starting with the highest interest rate debts first.
• Watch your credit card utilization: Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Keeping your utilization ratio below 30% can help improve your credit score.
• Only apply for new credit when you really need it: Each time you apply for credit, it can have a small negative impact on your credit score, which can add up if you’re constantly applying for more credit. 
• Consider leveraging a secured credit card or credit builder loan: If you're just starting to build credit or are trying to improve a poor score, consider using a secured credit card or credit builder loan. These options are both relatively safe ways you can establish a positive payment history and improve your credit score over time.

Final Word

While Equifax and TransUnion may use slightly different scoring models, they both play an important role in generating credit reports that lenders use to make decisions about lending to you. By regularly checking your credit reports with both agencies (and Experian) disputing any errors you find, and taking steps to improve your credit, you can work towards a healthier financial future. 

Just remember, building good credit takes time and effort, but with patience and dedication, you can achieve your financial goals.