Which Credit Reports Do Lenders Use for Credit Card Applications?
When you're applying for a new credit card in the United States, the credit report that matters most to you is probably the one from Experian. We looked at 1,226 public, consumer-reported credit inquiries from the last two years (from January 2016 to December 2017) at the six (6) largest U.S. credit card lenders that hold more than 70% of the U.S. credit card accounts. The conclusion was that Experian is the most popular choice by lenders. Using this information, you can prepare which credit report you should focus on to maximize your chances of approval success.
With that said, other key findings include:
- Capital One pulls from any credit bureau with relatively equal likelihood
- Discover is the exception — appears to use Equifax more often
- American Express almost never uses Equifax or TransUnion
Here is the breakdown of our research to bring you the percentages of which credit bureaus were used by the top credit card lenders:
Credit Reports Used By Credit Card Lenders
| Lender | Equifax | Experian | TransUnion |
|---|---|---|---|
| Citi | 35% | 54% | 11% |
| Chase | 17% | 62% | 21% |
| Capital One | 9% | 64% | 27% |
| Bank of America | 32% | 36% | 32% |
| Discover | 50% | 29% | 21% |
| American Express | 4% | 93% | 3% |
Our Research
Credit and loan applications require that the bank or entity considering lending you money must check your credit report to see if you’ve had a history of being a reliable, trustworthy borrower; in these cases, the bank will perform a “hard inquiry” of your credit, versus a “soft inquiry” that doesn’t affect your credit score (like if you checked your own credit).
We pulled our data from CreditBoards.com, by looking at who applied for credit or a loan through the bank during 2016 and 2017. In most cases, the bank pulled each applicant’s credit report and performed those hard credit checks through Experian.
Why the Data Matters to You
There’s a reason why you have three FICO scores from all three credit reporting agencies. Each one uses its own credit criteria, so you may end up with three (slightly) different scores.
For instance, you could be on the cusp of fair to good credit, but the bank you’d like to get a loan with rejects your application (or approves you with high interest rates). Why? Lenders may have used your Experian report/score that ultimately reflected more of the negative aspects of your credit history versus the information contained in your TransUnion report.
So, it’s important that you know which credit bureau a particular bank uses in its credit pulls since most banks are not likely to reveal which agency they consult with for credit checks. It could make all the difference in increasing your loan approval odds versus having to look for another lender.
Check Your Credit First
Too often, consumers will apply for loans or credit without even knowing their credit score or the contents of their credit reports. To leave it up to a bank or lender to approve or reject you based on information they know, but you don’t, means a lack of awareness and control over your finances, at least where your credit health is concerned.
It could mean applying for a loan assuming you have good credit, but being turned down not realizing you have bad credit, now made worse because the hard credit inquiry from your bank dinged your credit score worse than it already was.
Don’t wait to find out about your level of creditworthiness until after you’ve applied for a loan. Checking your own credit reports is the first, and most important, step to take before applying for credit. It lets you know where you stand and where to start improving your credit.
The Fair Credit Reporting Act requires TransUnion, Experian and Equifax to provide you with free copies of your credit report once a year.
I personally like to have my credit data readily available all the time, so downloading a credit-monitoring app is helpful because it gives you 24/7 access to your entire credit history without having to request it each time.
However, if you want your credit information straight from the source(s) that compile it, your most official place is to obtain your report directly from TransUnion, Experian, and Equifax. Choose from three avenues:
- Visit AnnualCreditReport.com;
- Call 1-877-322-8228; or,
- Send a request for a credit report to Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281.
Ensuring an Accurate Credit Report
Your credit reports are the official place to confirm your credit score and complete history of credit activity, but even then, errors may abound — both when you’re requesting your reports, and afterward.
Double check your personal information. A misspelled word or an inverted number in your address or Social Security number could prevent you from accessing your report. Make sure all your personal information is correct before sending out your application.
Manage trick questions. There may be some deliberate trick questions during the verification process used by AnnualCreditReport to verify that you are actually you. They may ask if you’ve lived at any of the three listed addresses or had a car or student loan through a list of lenders. If none apply, remember to click “none of the above.” If you’re unsure, it’s best to go back and confirm your own personal history, like where you’ve lived, if you’ve rented/owned, where you’ve worked, and whom you’ve had credit with, especially if the information is several years old and hard to remember.
Always save your credit report. Print out or save a copy of your report or reports if you’re viewing online since the site’s browser might lock you out if you try refreshing the page. But more importantly, keep recent copies of your credit report on hand, and use them to compare against your credit report the next time you request one. This can help you double check for errors, plus it’ll contain the info that makes answering verification questions easier.
Don’t worry if you can’t get copies of all three credit reports just yet. But if you’re looking for credit through a certain bank, request the credit report from the reporting agency they tend to use most often.
Once you have your reports in your hand, clarify that the information inside is correct. Remember to thoroughly check your credit reports and refrain from taking everything inside at face value, since a negative credit score could be the result of some mistake or outdated info.
Here’s what to look for:
- Unfamiliar looking or false information. It’s not uncommon that a credit report may contain negative information belonging to another person with the same name. Credit bureaus assuming you’re the same person, this erroneous combo of info can weaken your credit history and lower your FICO score. So, if you see a bankruptcy or foreclosure on your report but you’ve never filed Chapter 7 or even owned a home, it’s listed in error.
- Typos, misspellings. Just like checking your personal information when requesting your credit report, do the same after you’ve received a copy of it. Credit bureaus aren’t perfect, and prone to making mistakes, too; they may have incorrectly spelled your name or listed the wrong date of birth, address or credit account information.
- Old information. Likewise, if you’ve since turned around a poor credit history, but your credit report doesn’t reflect it, it could negatively impact your chances of getting a loan. There was that loan you defaulted on, but your report doesn’t denote that it’s since been paid in full. Or, there was a bankruptcy or legal matter that’s still listed on your report even though it’s been longer than seven years -- the standard time it takes for a negative mark on your credit report to expire.
Go over your credit reports with a fine tooth comb, and look for inaccuracies and inconsistencies with an eagle eye. It’s you, your credit, and your life, after all, and the smallest of errors can produce huge consequences. Each credit reporting agency gives you the opportunity to file a dispute if you’re sure that your credit report contains inaccurate information. In turn, they’ll investigate and correct the error if it’s valid.
Follow these links to each credit bureau’s credit report dispute/investigation process:
Improve Your Chances
Improving your credit score and history isn’t always about making corrections or filing disputes. It all starts with you and the financial choices you make. Keep up with these credit-healthy behaviors:
- Pay off outstanding debt. Too much active debt sends the signal to potential lenders that you’re not in the right place to be borrowing more money at the moment. Pay down as much debt as possible — credit cards, auto and home loans, student loans. Reducing your total balances also widens your credit utilization ratio, the amount of credit available to you versus the amount you actually use.
- Avoid applying for too much credit. It doesn’t matter which bank prefers which credit bureau for credit pulls. Apply for too many loan or credit products, and your score will take numerous hits from all of the hard credit checks performed at once. If you don’t get a chance for copies of all your credit reports, it’s recommended to try again in a few months, and the same goes for applying for credit; wait several months before applying again, giving you the chance to strengthen your credit and avoid too many hard credit pulls.
- Increase your lines of credit. But don’t use the extra credit you get. What, you say? Why would you increase your credit limit but not use it? Because by widening the amount of credit available to you, but using the same amount as before (or better yet, less credit), it shows banks and lenders that you’re not dependent or over-reliant on credit. This simple increase on its own better balances out your credit activity and increases your chances of getting approved for new credit.
According to Experian, it takes about six months to build credit, the time it takes for new, positive credit behavior to appear on your credit reports. Be patient, set financial goals, stick to them, and know your credit. Get copies of your reports and know the information inside and out. Building credit and having awareness of it gives you more leverage as a future borrower if you’re looking for credit from Bank of America.
