Not All Credit Agencies Use The Same Credit Scoring Model

24 April 18

online loan lenders

A man trying to attain a loan learned a not-so-known credit agency had deemed him to have poor credit, even though other agencies listed him as having excellent credit.

And, his story is far from unique.

According to Bobby Torrence, the credit reporting agency Sage Stream employs another kind of credit scoring model than Equifax, TransUnion and Experian. He pays his bills on time and is trying to eliminate his debt, which has propelled his score into the 800s (excellent credit). However, his bank pulled his credit report from Sage Stream and denied the loan based on their information.

Sage Stream, which uses a 0 to 999 scoring model, listed him as having a 631 score. This is considered poor credit by credit experts. When he asked Sage Stream for why, despite all the other scores saying he had great credit, they advised him to improve his score.

They also advised him to send them information on loans he’s had, bank account information and credit history. Torrence didn’t feel comfortable.

John Ulzheimer is a credit expert who said a company unwilling to talk to consumers about their credit scores makes the system even more confusing. He said the website makes no mention of how the credit scores are ranked and what is and is not a good score. It advises people to open a dispute if they feel it necessary.

Ulzheimer said this is good advice. He said people should leverage their federal rights and challenge the information’s validity. Ulzheimer said an investigation should be carried out to determine if the information is true.

For Torrence, he was able to get a better loan from a credit union or online loan lenders.

If you are denied credit for something listed on your credit report, there are things you can do:

  • Attain a copy of it and look through it. If something isn’t right, you do have federal protections to assist you.
  • File a claim, detailing the information you feel is wrong with the credit agency.
  • The agency will have 30 days to investigate the claim and give you the results in writing.
  • If a change occurs to your report based on that information, the agency is permitted to give you another free report.