Which banks use Experian only?

Banks that rely solely on Experian for credit checks

In the analysis of applicants for credit and charges, such as loans, and credit cards, among other financial products, banks and any credit providers rely on information from credit reporting agencies about consumer credit. There are three big credit bureaus in America namely Equifax, Experian, and Trans Union. It is common practice for most lenders to pull a credit report from all three of these agencies to get a comprehensive view of the applicant’s credit profile. Despite this, some banks work with credit reports and scores from Experian companies exclusively.

What Is the Reason Some Banks Only Pull Experian?

There are a few reasons why certain banks and lenders choose to pull credit reports only from Experian:

1. Cost Savings – Since it costs less to pay for credit reports from one bureau out of three, then it is cost-effective to pay for the reports from one of the bureaus only and not all three. This makes it possible for the banks to save on overhead costs.
2. Concentration - Some lenders operate in a niche, targeting a specific type of customer, for example, subprime borrowers or young people with no credit history. They may discover that Experian data is useful in the case of applicants who belong to the category of their interest.
3. Unique Features - Experian has complied long-term relations with the key players in the banking and lending sector. However, if the lending institution has already had an established partnership with Experian, it may be easier for them to continue using this source only without the addition of other data sources.
4. Business Level Strategy - It helps lenders minimize their evaluation differentials because all of them rely on one bureau. This is particularly useful in developing risk models, credit scoring systems, and automated decision engines based on insights from one agency in contrast to attempting to combine data from various agencies.

Experian Only Major Banks

All the major banks such as Bank of America, Wells Fargo, and Chase as well as thousands of other credit grantors, have credit scores from all three major credit reporting agencies. However, a few notable banks and lenders rely solely on Experian credit reports:

Fifth Third Bank

Fifth Third Bank is one of the biggest regional banks that mainly serves the Midwest and Southeast states in the United States of America. Given its geography, Fifth Third has determined that it requires the type of information that only Experian delivers – the depth of credit information necessary to assess applicants properly.

TD Bank

Even though TD Bank is a national bank in the United States of America, the institution discovers that raw data from Experian is most reflective of the credit record of the people who apply for TD credit cards and loans. Experian credit report is useful allowing TD Bank to make efficient lending decisions for the bank.

Synchrony Financial

Synchrony Financial holds the position of the biggest issuer of private-label credit cards in the United States of America. Most of the retail cards come with names such as PayPal, Walmart, Lowe’s, and many other renowned firms, and they are all offered by Synchrony. Exclusive credit reporting has been established by Synchrony after lending to consumers and partners across America for decades, particularly on private label and store-branded cards stating that only Experian meets their credit reporting needs.

You may wonder, why these banks use Experian only.

There could be several factors that each of the banks has come up with its own decision to use Experian exclusively for credit checks and reports.

A few of the factors that may be influencing these banks’ decisions include:

1. Target populations - Each of the banks mentioned above targets a specific population, which would perhaps align better with Experian’s datasets, including subprime or high-risk applicants.
2. Market overtones – Given that Fifth Third focuses its business mainly in some regions of the Midwest and the Southeast, it could benefit from acquiring information from Experian that is more detailed about consumers in those regions of the US.
3. Accuracy of credit information – Such banks might have conducted assessments and found that reports from Experian are most accurate and reliable for their underwriting need.
4. Reduced complexity – The use of a single credit bureau may enable these banks to develop fairly standardized underwriting processes and even deploy fully automated decision systems. This can easily cascade from application to lending decision with a view of increasing efficiency.
5. Parity – Current, active business relationships, ongoing and historical contracts, strategic links, and vendor/supplier relationships between these large lenders and Experian could influence Experian-only determinations.

Is It Wise to Apply for Credit with an Experian-Only Lender?

If you have planned to apply for a loan, or credit card from Fifth Third, TD Bank, Synchrony Financial, or any such bank or other financial institution that only considers credit reports from Experian then you should first look into your Experian credit report.

Review the report for accuracy and take note of key factors like:

• Your Experian credit score is a figure that ranges from 330 to 850 and shows your creditworthiness to lenders.
• total open accounts stated
• Credit usage involves the use of credit cards, personal loans, mortgages, auto loans, student loans, and commercial credit.
• The age and history of open accounts are especially important since they provide information about the company’s creditworthiness.
• Any blemishes or history that may be mentioned

This way you will be able to have an understanding of what the lender will be able to see when you apply for the loan from Experian credit report. If there are disparities between your scores at Experian Equifax and TransUnion then you should address these issues before applying for credit from an Experian-based lender. This will help ensure that the lender makes the right decision based on accurate and recent information provided by Experian.

The Bottom Line

Whereas most of the lenders pull credit reports from all three credit bureaus, some of the major banking institutions such as Fifth Third, TD Bank, and Synchrony, among others, rely on Experian credit reports only when considering any credit extensions. The reasons for using Experian data are different for each institution – some may point to geographical or demographic data, while others may hinge on the predictive nature of Experian data or the existing contracts with Experian. This way, you can see what creditors are likely to see when you apply for credit, whether it be a car or a home loan.

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