You’ve decided to do the responsible thing and monitor your credit score regularly. While South Africans are entitled to one free credit report in a 12-month rolling period from each credit bureau, using a third-party service like ClearScore means you get a monthly summary of your credit report directly in your inbox. This is free, convenient, and has the advantage of reminding you to check in on your credit score regularly.
So why aren’t those two credit scores the same? Your ClearScore credit score will rarely be the same as that you get directly from the bureau. Does this disparity mean ClearScore is wrong or bad? Not at all! There are good reasons for this slight difference, and today we will be unpacking them for you in greater depth.
Why is My Credit Score Different on ClearScore and Experian?
Let’s start with the basics- why is your credit score different on ClearScore compared to Experian? Especially as ClearScore says it uses Experian data! It is important to understand that, while all the credit bureaus receive the same information about your loans, they can be slightly slower or faster in processing and using that data. So updates and changes to your credit file may not be reflected simultaneously across all platforms, causing differences in scores. Additionally, each credit bureau employs slightly different algorithms and methodologies to calculate their credit scores, which means even 2 bureau reports with identical data can still have slightly different results.
Now, let’s talk specifically about ClearScore. Unlike Experian and other entities like TransUnion, ClearScore is not a credit bureau. It is a third-party service that tracks your credit score using data from the bureau. It doesn’t receive direct reports from lenders, nor does it create the credit score you see. It only reports it to you so you can monitor your credit more easily. While Experian’s data is heavily weighted in ClearScore’s model, it also uses data from another, smaller bureau (illion) and aggregates the results. Additionally, when Experian itself changes your credit score, the effects are immediate. ClearScore must wait for that update and then show it on their platform. So small discrepancies are inevitable.
Why Does Experian Say I Have a Different Credit Score?
So, the credit score Experian says you have, and the one you see at other credit bureaus or from ClearScore, may be different. Remember, this is due to the twin facts of different financial algorithms and models between bureaus, and the fact that reporting discrepancies can arise. Third-party services like ClearScore also commonly aggregate data from two sources, and are reliant on the credit bureaus themselves updating information. In turn, those updates must be processed by ClearScore itself and then changed.
So it is common to see different scores between different bureaus and reporting services. However, you should still fall in a roughly similar score band at each bureau. If you are seeing small differences- say, 780 at one, and 750 at another- that is nothing to worry about. You should only be concerned if you note a major discrepancy. This could mean there is a mistake or fraud registered at one bureau, or that they have failed to update something the other bureaus have, like a defaulted debt being paid off. The possibility of these errors occurring is one reason why monitoring your credit score regularly is so vital.
Is Experian Better than ClearScore?
Comparing Experian to ClearScore is comparing apples and bananas. Experian isn’t better than ClearScore- it is one of the sources of ClearScore’s data! They do different things.
Experian is a credit bureau that directly receives and analyzes your lending data and uses it to create a credit score based on their in-house algorithms, created through the complicated field of actuarial science. You can access these reports for your financial peace of mind, but their audience is the lenders assessing your creditworthiness.
ClearScore is simply a convenient free service that tracks credit bureau data in an accessible way to empower people to understand their credit profile better. It doesn’t make its own credit score, it just summarizes what the bureaus have to say.
What is the Most Reliable Credit Score Check in South Africa?
By their nature, all third-party credit report services will give a (slightly) different score to those used by the bureaus, especially if they aggregate sources. This doesn’t make them wrong in any way. The bureaus differ slightly between themselves, too. So rather use third-party services and bureau credit reports to monitor the broad trends in your credit history. Don’t get hung up on the specific number!
In South Africa, no single credit bureau is inherently more reliable than others. Instead, it’s advisable to pull reports from multiple credit bureaus, including TransUnion, Experian, and Compuscan, to ensure you have a comprehensive overview of your credit profile. By regularly monitoring your credit reports and scores across multiple platforms, you can identify discrepancies between bureau data and address any inaccuracies before they hurt your credit score.
Reputable, reliable credit score check services like ClearScore give you peace of mind and conveniently prompt you to check your score each month. This encourages good financial habits and will empower you. However, remember that scammers are always on the lookout for ways to get ahold of your financial data and private information. Before you sign up with a third-party service, make sure you are dealing with a trusted and registered one. In South Africa, both ClearScore and Kudough are well thought of. ClearScore is the most popular.
Which Credit Score Do Banks Use?
Every lender, including individual banks, will primarily use one or two bureaus. It would be impossible to check them all without considerable delays in the approval process. Most of the South African banks use one of the ‘big 4’ bureaus- TransUnion, Experian, XDS, and Compuscan. If you want to know which one, specifically, your bank will use, just ask them! It isn’t a secret.
Hopefully, you now understand the nuances involved in credit scoring, and why credit score may be a little different between bureaus and third-party credit score services. This isn’t something to worry about, but it is important to understand why it happens so you can take control of your credit journey and make the most of the information at your fingertips.
