When assessing the loan application, the lenders are interested in the probability of issuing money to you. To assist with this, many lenders examine one or more of your credit reports from the three major credit reporting agencies- Experian, TransUnion, and Equifax. Therefore do lenders particularly tend to employ your Experian credit score when making credit decisions? Read on to discover the answer to this question.
An Experian credit score is therefore a credit score that has been produced through the use of information contained in the Experian credit report.
First, one needs to learn what an Experian credit score is. Experian is one of the three credit reporting agencies that gather information on people’s financial status and assign them a credit score ranging from 300 to 850. This score is also popularly referred to as the Experian credit score. The higher the number, the better in this case about credit rating approval.
Namely, the Experian credit scores describe the probability of becoming severely overdue on credit payments within the next 2 years. Thus this score is used to come up with a probable level of risk that comes with lending money to you, and the higher the Experian score the less risky you might turn out to be in the eyes of the lenders.
Is Experian Used By All Lenders?
It is common for lenders to pull credit reports and credit scores from the three main credit bureaus, which are Experian, TransUnion, and Equifax. Such lenders may decide to pull credit bureau reports of only one or two credit referencing agencies.
Experian has it that the majority of top lenders do pull your Experian credit report and score when considering a submitted loan application. These are the national banks, the mortgage lenders and brokers, credit unions, and even the installment lenders such as those with personal loans.
Therefore, even though Experian credit scores are often used, there is no certainty that every provider will consider this particular score. That’s why it is advisable to check all three credit reports and aim at maintaining high scores for the credit bureau reporting companies when applying for credit.
Why Is Experience Credit Score Important to Lenders?
There are a few key reasons why the majority of lenders view Experian credit scores during the lending decision process: There are a few key reasons why the majority of lenders view Experian credit scores during the lending decision process:
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Volume of Data - Credit information is gathered from more than 10,000 credit providers and any other data compilers. This means that Experian may have more detailed information on your credit history than the other credit reporting agencies.
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Recurring patterns – Most people usually have very close scores between the different bureaus, but Experian tries to ensure consistency in scoring across various consumers.
Consumer Reach – As of now, Experian currently possesses information regarding more than 220 million consumers; this is closely followed by the fact that 98% of the adult population in the United States is covered in the company’s database. This broad perspective of consumers offers a lot of benefits to lenders.
In short, the lenders who provide credit scores to Experian do so because Experian collects some of the most comprehensive and accurate information about how likely it is for a particular person to default on a loan. In particular, by using your Experian credit score to review, the particular lending risk exposure for a lender is diminished across applicants.
How Do I Find Out My Credit Score on Experian?
As mentioned above, many lenders use your Experian score, so it will be useful to track it yourself too. Here are some ways to check your latest Experian credit score: Here are some ways to check your latest Experian credit score:
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Go to AnnualCreditReport. com and obtain a free copy of the credit report and FICO-based score from Experian once a year.
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Buy an Experian credit score and full credit report by visiting the Experian website or using the mobile application. Discounted subscriptions are available.
Go to the Experian website and create a free account to get your latest VantageScore credit score which updates every 30 days. This employs a scoring system akin to FICO.
It enables you to track your credit status as seen by the bureau through the Experian credit score. This way you can detect and address any shenanigans and optimize a low credit score before applying for a loan where the lender is going to scrutinize your Experian credit report.
Tips to Enhance Your Likelihood of Securing a Loan
If you are thinking about applying for a mortgage, auto loan, or any other credit product, you should know that most lending decisions are based on your Experian credit score.
Here are some tips to boost your approval odds:
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Keep the credit card balances small because the balances affect 30% of the Experian credit score.
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Some of them are as follows; do not default on payments and have debts placed for collections since these factors have a direct impact on the score.
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Reduce the number of hard inquiries by only applying for credit when needed since multiple inquiries are considered a lending risk.
Update any discrepancies in your Experian credit report that may include wrong information such as old credit accounts or credit accounts linked to fraudulent reports.
It is always wise to work on your Experian credit score long before you even start the process of applying for a loan. The chances of getting approved and better loan terms are equivalent to your score.
The Bottom Line
More preferable would be to review and manage credit reports and scores from all three major credit bureaus available. But practically, focusing on your Experian credit score is reasonable since most lenders pay significant attention to this score. Surveillance and enhancing your Experian credits while maintaining the general well-being of your credit profile can give your loan application a shot as most creditors place a lot of value on Experian when delivering loans.
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