It’s common to find small variations in your credit scores from Equifax, Experian, and Illion. These variations stem from three key factors: different scoring models, inconsistent data reporting, and algorithmic variations. Understanding these reasons can help you better manage your credit health and avoid unnecessary concerns.
What Is A Credit Score?
A credit score, also known as a credit rating, is a numerical representation of your reputation as a borrower. It is calculated based on the information contained in your credit report, which includes details about your financial history, such as loan repayments, credit applications, and any adverse events like defaults or bankruptcies. This score helps lenders assess the risk of lending to you and determines factors like your credit limit and interest rates. A higher score indicates a better credit profile, making it easier to secure loans or credit at favourable terms.
Different Scoring Models and Scales
Each credit reporting agency uses its proprietary algorithm to calculate scores, leading to varying credit scores even when assessing the same financial data.
- Equifax: Scores range from 0 to 1,200, with “excellent” starting at 853.
- Experian: Uses a 0 to 1,000 scale, where 800 – 1000 is “excellent”.
- Illion: Operates on a 0 to 1,000 scale, through specific band thresholds that differ from Experian.
These scoring models weigh factors like repayment history, credit mix, and credit enquiries differently. For example, one bureau might prioritise recent credit applications more heavily, while another focuses on long-term repayment patterns, which is what leads to varying credit scores.
Data Reporting Discrepancies
Not all lenders report financial activity to every bureau. Key reasons for data gaps include:
- Selective Reporting: A bank might share your credit card activity with Equifax but not today might take weeks to appear on Experian;s records.
- Timing Delays: Agencies update data at different intervals. A late payment reported to Equifax today might take weeks to appear on Experian’s records.
- Limited Credit History: If you’ve only used credit products reported to one bureau (e.g. a utility bill sent to Illion), other agencies may lack sufficient data to generate a score.
Variations in Credit Report Content
Your credit reports across agencies may include different information, affecting score outcomes:
Factors
Repayment History
Impact on Scores
Late payments reported to one bureau but not others lowers scores unevenly.
Credit Mix
A diverse portfolio (e.g. mortgage + credit card) boosts scores more at some agencies
Public Records
Bankruptcies or court judgements may appear on one report but not others
Enquiry Frequencies
Multiple loan applications in a short period harm scores more severely at certain bureaus.
Scoring Formula Differences
While all agencies consider core factors like repayment behaviour, their formulas assign varying credit scores and weights:
- Equifax: Emphasises credit utilisation (how much of your available credit you use) and repayment consistency.
- Experian: May incorporate alternative data, such as rental repayments, if reported.
- Illion: Often focuses on traditional credit products (loans, credit cards) and public records.
These distinctions mean a single financial action (e.g. paying off a loan) could impact your scores differently across agencies.
Errors and Omissions
Mistakes on credit reports are a common yet overlooked cause of score variations. Approximately 1 in 5 reports contain errors, such as:
- Incorrect personal details (e.g., outdated addresses).
- Fraudulent accounts opened in your name.
- Misreported payment defaults or credit limits
Regularly reviewing reports from all three bureaus helps identify and rectify inaccuracies before they affect loan applications.
How to Check and Improve Your Credit Scores
Step 1: Request Your Reports
Under Australian law, you’re entitled to a free credit report every 90 days from each bureau.
Step 2: Address Discrepancies
If you have a significantly varying credit score:
- Identify Missing Data: Compare reports to see which accounts or payments are absent from certain bureaus.
- Dispute Errors: Contact the bureau to correct mistakes (e.g., wrongly listed defaults).
- Improve Consistency: Ensure lenders report to all agencies by asking them directly.
Step 3: Strengthen Your Credit Profile
- Pay on Time: Set up automatic payments to avoid missed deadlines.
- Limit Applications: Space out credit enquiries (e.g., loans, credit cards) by 3–6 months.
- Diversify Credit: Responsibly manage a mix of products (e.g., mortgage, credit card)
Which Credit Bureau Do Lenders Use?
Most Australian banks rely on Equifax and Experian, though some also check Illion. Since lenders may use any bureau, maintaining strong scores across all three maximises approval odds.
Conculsion
Varying credit scores are normal due to differing scoring models, data reporting practices, and agency-specific criteria. Rather than fixating on minor differences, focus on maintaining consistent, positive credit habits. Regularly monitor your reports, correct errors promptly, and adopt strategies to boost your scores holistically. By understanding these nuances, you’ll be better equipped to navigate Australia’s credit landscape and secure favourable financial opportunities.
