Experian vs. TransUnion: How Two Major Credit Unions Compare

Experian and TransUnion are two of the three major credit bureaus in the United States. Credit bureaus collect data on consumers to develop credit profiles and scores. These scores help businesses assess the creditworthiness of their potential customers. Credit factors like on-time payments, late payments, credit utilization, available credit, debt levels, and defaults affect creditworthiness.

With an excellent credit score, homebuyers can save up to 1% on interest for a mortgage, and having a strong credit profile can also save thousands on borrowing costs over the lifetime of a loan.^[1]CNBC. “What are the biggest advantages of a good credit score? A consumer advocate explains“. Accessed on May 30, 2023. However, most American consumers are unaware of the differences between the three major credit bureaus in the United States. This can make monitoring and building credit difficult for several families and individuals.

In this detailed guide, we explore Experian and TransUnion so you can access greater credit opportunities in the future. Let’s dive in!

Experian vs. TransUnion: A Brief Overview

Experian, founded in 1996, has now become the largest U.S. credit bureau. At present, Experian collects data on more than 500 million consumers across the globe.^[2]Experian. “Agency and alliances go to guide“. Accessed on May 30, 2023. It provides consumer credit scores ranging from 300 to 850, with higher scores indicating better creditworthiness. Recent data suggests the average Experian credit score in the United States is 714.^[3]Experian. “What Is the Average Credit Score in the U.S.?“. Accessed on May 30, 2023.

On the other hand, TransUnion first opened its doors in 1968 and developed into the credit bureau powerhouse it is today. As with Experian, TransUnion scores exist on a scale of 300 to 850.

Experian vs. TransUnion: Services Offered

While Experian and TransUnion traditionally only provided credit reports, both companies now offer additional credit monitoring and building tools. These tools are user-friendly and allow consumers to obtain a quick overview of their credit profiles. Customers can also access information about available credit cards and loans for individuals with similar credit scores. The monthly subscription offered by both bureaus can help consumers rebuild credit, find lenders, and protect their financial information online.

Additionally, Experian and TransUnion are known for offering identity theft protection. While some of these extra services at Experian and TransUnion are free, premium products are available. These products include more in-depth credit analysis, identity theft insurance, and other credit-related tools.

The two credit bureaus offer relatively similar products, so deciding which subscription to pay for will largely depend on which bureau you prefer and the one your lenders use to assess creditworthiness). Below, let’s explore the services available via Experian and TransUnion:

Credit reports

First and foremost, Experian provides credit reports to businesses and consumers. Experian legally must provide U.S. consumers with one free credit report per year. So if you only check your credit report once a year, you should never need to pay.

In previous years, Experian strictly enforced this policy, but now the company offers a
“Free Experian Credit Report and FICO Score” product. This product allows users to access a monthly credit score and summary without paying a penny.

Experian CreditWorks

Experian CreditWorks is comparable to the “Free Experian Credit Report and FICO^® Score” product listed in the section above. For the CreditWorks Basic plan, consumers can access a credit report, credit score, or any other basic features.

However, there is CreditWorks Premium for consumers wanting additional tools and features for $24.99 a month. This package offers credit report monitoring from all three major credit bureaus, daily score updates, credit score simulators, and more.

Experian Boost

Experian Boost is a program created to help consumers report payments to improve their credit scores. You can boost your credit instantly by registering non-reported bills, like your Netflix or phone bill, to Experian Boost.

While this service is free, there are some eligibility requirements. For example, you must keep an active account on your credit report with activity within the past six months. Therefore, consumers without a credit history will find it hard to access Experian Boost.

Experian CreditMatch

Experian CreditMatch helps consumers access financial products, like credit cards and loans that match their credit profiles. While active, it assesses your credit report and determines which loans and credit cards best fit your creditworthiness. Overall, Experian CreditMatch can improve the chances of consumers obtaining financial products from leading providers.

Experian services for business 

Experian provides various credit monitoring services designed for business owners. These services enable you to assess the creditworthiness of potential business partners, simplifying your interactions with reliable clients.

Affordable options for credit reports range between $39.95 and $49.95, depending on how in-depth the report is. If you check your business’s score routinely, sign up for the Experian Business Credit Advantage at $189 per year.

Likewise, should you need to track multiple business credit scores, the Business CreditScore Pro plan is a suitable option. It costs $1,495 annually and allows you to check reports for up to 30 businesses per month continually. If you’re a vendor extending credit to businesses routinely, this is a very useful monitoring tool.

Credit reports

Alternatively, TransUnion only provides personal credit scores, not business credit scores. This can be a determining factor if you own a business, as obtaining good business funding rates can depend on a solid credit score.

As with Experian, TransUnion is legally required to provide consumers with one free credit report per year, which can be accessed at www.AnnualCreditReport.com. Likewise, accessing a basic credit summary via TransUnion’s TrueIdentity service is free, which we’ll explore in more detail below.

TransUnion TrueIdentity

TransUnion TrueIdentity, similar to Experian CreditWorks Basic, allows consumers to see a basic overview of their credit at no cost. Additionally, users can freeze and unfreeze credit at any time, making it more simple to prevent identity fraud.

TransUnion TrueIdentity also provides its users with $25,000 in identity theft insurance. Considering this product is entirely free for U.S. consumers, it’s hard to beat its value!

TransUnion Credit Monitoring

If you’re searching for a premium TransUnion credit service, TransUnion Credit Monitoring is the perfect solution. With this product, you’ll hold continuous access to a regularly-updated TransUnion credit report and score. Likewise, TransUnion notifies you if there are any alarming changes to your credit report from all three credit bureaus. This product costs $24.95 per month and comes with up to $1 million in identity theft protection.

TransUnion vs. Experian: What’s the Difference?

After overviewing the services offered by TransUnion and Experian, you might be wondering if there is a clear difference between the two. Let’s explore their differences in more detail below:

As discussed, both Experian and TransUnion must provide free credit reports at least once per year to U.S. consumers. So, for accessing a basic report, there’s no difference in pricing. Additionally, both bureaus offer basic credit monitoring for free.

Similarly, moving on to paid-for services, it’s hard to find much of a difference in pricing. Both the premium credit monitoring services (Experian CreditWorks and TransUnion Credit Monitoring) cost $24.95 per month. With little variation in price across all service levels, it’s difficult to separate them in terms of cost.

The products and services offered by Experian and TransUnion are mostly the same, aside from one major difference. As we mentioned earlier, Experian offers business credit reports and TransUnion does not. If you’re looking for business credit services, the answer is Experian.

Also, both Experian CreditWorks and TransUnion Credit Monitoring offer premium credit management tools as well as other ancillary benefits. However, while both credit bureaus’ monitoring tools are relatively similar, Experian offers a more advanced “credit matching” tool. Experian CreditMatch makes it simple to find credit cards and loans available to individuals based on their credit profile. While TransUnion offers some valuable information about credit cards, loans, and credit requirements, Experian’s tool is known to be a bit more advanced and user-friendly.

Gauging customer feedback for credit bureaus is challenging, as negative reviews often come from disgruntled consumers with negative items on their credit reports. While Experian has a B+ rating with the Better Business Bureau, there are many complaints about the company’s online practices. Likewise, TransUnion has significant negative feedback from consumers and has an NR (not rated) classification from the BBB.

Why Do Credit Scores Differ?

One of the most frustrating issues associated with the three major credit reporting agencies is that scores may differ depending on which credit bureau you check your report at. For this reason, checking your credit score with all three bureaus is very important.

So, why do credit scores differ? There are multiple reasons — let’s explore the common causes below:

1. Different Algorithms

Firstly, credit scores vary because different credit providers use contrasting algorithms. This means credit factors are weighted will differ depending on the credit bureau being used.

So, for example, if one credit bureau weighs credit utilization more heavily than another, and you carry excessive credit utilization, you can expect to carry a lower credit score with that bureau.

It’s rare for an individual to have the exact same credit score on Experian and TransUnion. While it’s possible, it’s unlikely that all your credit factors will combine to result in the same score across multiple credit bureaus.

2. Different Reporting Dates

Credit bureaus may sometimes take days or weeks to update your credit report with information. For example, if you pull your credit file on a specific date, there’s a chance other bureaus won’t include the same information updated in your report.

3. Different Creditors

Sometimes, a creditor won’t report to all three credit bureaus, creating a disparity in the credit events found on each credit report. For example, if you apply for an auto loan, the lender may only pull your Experian credit report, leaving Equifax and TransUnion without a hard inquiry. So as creditors use different bureaus to source information, discrepancies can emerge.

4. Mistakes

Lastly, mistakes happen. Sometimes creditors or credit bureaus will report incorrect information, which can negatively impact your score. Hence, it’s always essential to check your credit report routinely. If you notice a huge disparity between your credit scores on Experian and TransUnion, it’s wise to double-check your report’s core credit events.

Also, mistakes on your credit report may indicate identity theft. If someone uses your SSN and personal details to apply for a credit card, request a loan, or engage in any other financial activity, it may show up on one of your reports.

Ways To Check Your Credit Score

You may want to check your credit score before applying for a new mortgage or to ensure your credit report has no mistakes. However, checking your credit report can be expensive if you don’t choose the correct method. Below, let’s explore the best ways to review your credit report with both Experian and TransUnion:

1. Request A Free Credit Report

US law requires the credit reporting bureaus (Experian, TransUnion, and Equifax) to provide consumers with one free annual credit report. In effect, this means you can access three credit reports for free each year, although they will all be from different credit bureaus.

This option is best if you only need to check your credit report once and don’t want to spend money. Credit bureaus don’t make this a convenient process so you may need to wait a few days before accessing your report.

As previously stated, to request a free credit report, you can head to the Annual Credit Report website. If you need to check your credit profile instantly, you may need to pay for an additional service.

2. Pay For A Service From Experian or TransUnion

Next, if you want to check your credit report routinely or require instant access to your credit score, you must pay for a service from Experian or TransUnion. Both bureaus provide excellent credit monitoring tools, helping consumers view their credit data and develop strategies for improving their credit scores. While this costs money, it can be beneficial if you’re attempting to build business credit or rebuild personal credit.

Final Thoughts on TransUnion vs. Experian Credit Scores

Understanding the distinctions between TransUnion and Experian’s services can help you select the best credit monitoring products for your business needs. A strong credit score is necessary for many businesses. Especially for businesses looking to apply for business funding.

As discussed, Experian generates business credit scores, while TransUnion does not. Business credit scores are essential if you’re looking to access business funding options at more favorable rates. By evaluating the unique offerings, data, and credit assessment methods of each bureau, merchants are able to make informed decisions, identify potential opportunities, mitigate risks, and navigate credit-related challenges more effectively.