When it comes to credit reporting, why 3 scores and not one? There is a simple answer, and a more complicated answer to that question when dealing with a credit rating check. You have 3 scores because there are 3 major bureaus that keep track of credit scores in the United States. Those companies are Equifax, Experian and TransUnion. Each company may have slightly different information and a different way of tracking your credit. However, becoming familiar with each company is the first step to understanding credit report issues.

Why 3 scores with FICO?

FICO, the Fair Isaac Company, has been tracking credit information since the late 1950s. They have a precise and complicated mathematical formula for taking the information given to them by the 3 major bureaus and converting it into a 3-digit number known as a credit score. When FICO determines your credit rating, it ends up with 3 different numbers.

Why 3 scores? This is because FICO calculates the information from each credit reporting bureau individually instead of combining them. And since each agency has a slightly different scoring method and may have slightly different information, the 3 numbers FICO gets as a result can be different.

Why 3 scores are Helpful

Having 3 scores instead of one can actually be helpful to the consumer. If one of the credit reporting agencies has an error on its report, for instance, and the score from that agency falls far below the other two, it’s easy to flag a problem and get it corrected. This will avoid a lengthy credit report dispute. A lending institution that chooses your middle FICO score to determine your credit worthiness would automatically have the report that doesn’t contain the error. If the scores were combined, that mistaken score would bring the average down and risk your chances at getting credit.

Another reason why 3 scores is a good thing, is because credit reporting agencies do make mistakes and each sometimes have different information, it’s a good idea to request the free credit reports you’re entitled to once each year and start monitoring your credit rating to watch for changes and possible errors.

It’s important to check your credit score frequently, because if you’re monitoring carefully and something changes mistakenly you can contact the 3 major bureaus and get the mistake corrected before it can adversely affect your credit scores. You can contact the 3 major bureaus at any time and request free credit reports, or you can opt to purchase them through FICO. But you’re entitled to free credit reports once a year, or after a lender or other institution receives a negative report.