A credit bureau or CRA (Consumer Reporting Agency) is not a governmental department or agency. They do not have any governmental or police powers and they are not even closely monitored by the government like the way banks are. In fact, there is nothing official or governmental about them or their credit scores.

A CRA is simply a for-profit business.

They sell products to generate revenue. The product they sell is your credit report and they sell it to anyone who is willing to pay cold hard cash for it as long as they have your permission. And most importantly, the CRAs do not even generate your credit score. Another for-profit business, the Fair Isaac Corporation, takes the information that the CRAs have acquired about you and then calculate a score that is supposed to be representative of your risk. That is, the higher the score, the lower of a risk you have if someone were to loan you money. And this scoring program from Fair Isaac is a proprietary software program that doesn’t have to be shared with the public.
 

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In addition, the credit score that the Fair Isaac Corporation generates is not going to be same for all three CRAs.

The reason is because the three big CRAs, Trans Union, Experian, and Equifax, are private businesses and are competitors of each other. All three of them gather most of their credit information from their customers, known as subscribers. And this method is purely voluntary. There is no federal law that compels a private company to report credit activity to all the CRAs. And if a business doesn’t want to report any credit information at all, it doesn’t have to. As a result, a credit report from one CRA may look very different from a report created by another CRA.

The credit bureaus also sell multitudes of different scoring programs that generate different variations of your credit scores to the CRA’s subscribers. The different versions of the scoring programs sold by the CRAs are skewed to a specific industry. For instance, an auto credit score takes into account certain factors of your credit report that other industries don’t care about. The same goes for insurance, mortgage, and other industries. The credit bureaus have quite a diversified range of products and versions of scores that it can fit into any creditor’s industry and budget.

And other than the scoring programs from the CRAs, there are also tens of thousands of third party vendors who hawk their own products. Some outfits sell tri-merge programs that produce a composite of data from all three CRAs. Other third parties use their system to establish an entirely different paradigm for determining a credit score.

In other words, there is absolutely no single credit score that is a one-size fits all. And there is no such thing as an official credit score or any kind of governmental body that makes it official. In the end, a lender simply has so many different products from the CRAs and as well as other third parties to choose from in order to see your credit score.

It’s understandable that someone with problem credit would like to see the improvement of his or her scores on a day to day basis but such a concern is totally unwarranted since it is bogus to begin with. Whichever place you buy a score from even if it is directly from the Fair Isaac Corporation, is still not going to be the exact same score that a particular lender is going to see or use, ever.

Instead, the emphasis ought to be for the consumer in becoming more knowledgeable of each factor that impacts his or her credit score. Public pressure has forced the Fair Isaac Corporation to at least give a description of what is used in creating the score as well as a list of factors demonstrating what can be done to improve it.

In addition, exercising responsible credit behavior is the surest way to better your score at any given time. Paying your bills on time and keeping your revolving credit from getting outrageous does improve your credit report. Unfortunately, this process will take a long time but time is what ultimately creates a better score.

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