A reader is also confused that he has two different scores.

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Question: We had a chapter 13 bankruptcy that was discharged in March 2016. The only debt we have is our home mortgage, which has always been paid on time. But our FICO score has dropped with Experian by 8 points — and TransUnion by one. No one can explain why. Can you?

— Lawrence in Florida

Howard Dvorkin answers…

What seems like an easy question has a long answer, Lawrence. That’s because there are many reasons for what looks like a simple problem.

Why are credit scores so confusing?

Because they want it that way. I’m talking about the credit bureaus themselves – they want to confuse the public. Of all of the questions I’m asked one of the most common is also one of the most frustrating…

How do I know what my Credit Score is really? The reason it’s so complicated is simple, no one person or company is in charge of your credit score. You’ve probably heard of FICO score but FICO is actually a private company and its initials stand for Fair Isaac and Company. They’re actually a bunch of mathematicians that compile all of this information that reports out to other people if you’re a good risk candidate or not.

But a FICO score isn’t the only score you have. Three big credit bureaus – Experian, Equifax, and TransUnion compile all your credit and debt information, and they have their own complicated scores. They have these crazy names, like these: TransUnion Credit Vision scores, Vantage scores, Experian Plus score, the Fair Isaac Risk Model V2SM. Crazy, right?

Thankfully, those credit bureaus have rules. You can order your credit reports, which is what the scores are based on, and check them for mistakes. If you find mistakes, you can get them removed. You might be surprised by how many mistakes there are.  But the best part is you can order a report from each bureau once per year for free. Just go on Annual Credit Report.com and check it out.

If you still need help, call Debt.com. You can get a consultation with an expert for the same price – free. And don’t forget to sign up for our daily newsletters – they will really help you out.

First, let’s explain why your score differs by a few points between Experian and TransUnion. Each of those credit bureaus — and even a third called Equifax — are private businesses. Credit card companies and other lenders don’t always give the same information to each bureau, and each bureau has its own weird rules and technical procedures. That’s why there are specific scores with names like “TransUnion FICO Risk Score, Classic 04” and “Experian/Fair Isaac Risk Model V2SM.”

Second, a bankruptcy is obviously a big hit on a credit score, but there are a slew of minor ones that can also drag down a score — like closing old accounts. That decreases your “credit age,” which is something the bureaus look at. Why? Because the longer you have, say, a credit card that you pay off, the more responsible you appear with handling credit and debt. That matters to lenders thinking about giving you a loan. Same thing goes for applying for new credit too many times.

Third, you should pull your credit reports and see if there are mistakes on one or more. Given the sheer volume of data Equifax, Experian, and TransUnion process each day, even a small percentage of errors is a huge number. The Federal Trade Commission estimates “one in five consumers had an error” on their credit reports. Thankfully, you can dispute these and get mistakes removed. Read more at Learn about the Credit Repair Laws that Protect Your Rights.

Fourth, check those reports carefully for identity theft. Make sure no one is opening new credit in your name. This is the fastest-growing crime in the nation, and the numbers are staggering.

Here’s what I recommend, Lawrence: Read the Debt.com report How to Fix Your Credit for Free or for a Reasonable Price. To answer your original question will require eliminating some explanations. You might want to seek a credit repair consultation if you can’t deduce the situation on your own.

Find all the tools and services you need to achieve good credit in Debt.com’s Credit Solutions Center.

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I’m sorry the answer isn’t as straightforward as the question. The good news is, experts are available to help you.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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Meet the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

CPA and Chairman

Dvorkin is the author of Credit Hell and Power Up and Chairman of Debt.com.

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Article last modified on October 15, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Why Did My Credit Score go Down Two Years After My Bankruptcy? - AMP.