Can You Tell A Lender What Credit Reporting Agency to Use?

Jackie is getting ready to purchase a new car and needs to take out a car loan. To prepare for the transaction, she has done her homework and accessed her credit reports and credit scores and checked the credit reports for accuracy. She has noticed that the credit score on one of the credit reports is about 20 points higher than the other two. She would like it if the lender would pull her credit report from this particular credit reporting agency (CRA) and asked us if she can make this request when seeking the auto financing.

In the U.S. we have three major credit reporting agencies (Equifax, Experian and TransUnion) which collect credit information on consumers and sell that information back to lenders in the form of credit reports and scores that lenders use in their credit evaluation decision process.

For some credit decisions, the lender may pull all three credit reports on the applicant to ensure they have complete information before making the credit granting decision. This is a more common practice when evaluating an application for a mortgage loan — typically associated with a large loan amount. For other credit applications (such as a credit card or automobile loan), the lender will typically pull a credit report on the applicant from just one of the three CRAs.

Unfortunately, there is no standard set of criteria or rules I can share that lenders use to determine which CRA to access for a given applicant. Understand, the CRAs compete very hard to get lenders to access credit reports from them and the lenders decide which CRA to use based on factors such as the cost of the credit report, perceived quality of information coverage and quality in a given geographic area, customer service standards and operational efficiency, to name a few.

You can certainly make the loan officer aware of your preference, but it is likely they are required to access whatever CRA has been programmed or mandated by the lender’s credit policy group. Knowing this, it is in your best interest to make sure your information is accurate at all three CRAs to increase your chances of being approved for the credit you are seeking.

Image: Stan Dalone, via Flickr