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If you’ve ever pulled your credit files from each of the three major credit bureaus and tried to compare them, you know that certain information in your credit records likely to be different. But did you also realize that the manner in which the credit bureaus present your credit data is also like to differ substantially?

Here are some highlights of the differences between each credit bureau’s reports – and how that information can help you to both better understand and improve your credit rating.

• Equifax Highlights

As of this writing, Equifax reports are the only ones that summarize “Open Accounts” and “Closed Accounts,” making it far easier to distinguish this information and choose which accounts you want to examine first. (With Experian and TransUnion, all accounts are grouped together and listed alphabetically).

Equifax files also often show an 81-month credit history for your credit accounts. In some cases, however, particularly for closed or paid accounts, you will see a statement saying: “No 81-Month Payment Data available for display.”

• Experian Highlights

Experian credit reports contain a unique feature that many users find extremely enlightening. For all of the accounts listed in your credit file, Experian shows you “Status Details” indicating when an account is scheduled to fall off your credit report. For example, since positive payment history remains on your credit report for 10 years, an auto loan that you paid off and closed in July 2008 will show the following Status Details: “This account is scheduled to continue on record until July 2018.” By contrast, let’s say you had an account go to collections and ultimate get written off by a creditor. For those of you who with these and other negative marks in your credit file, you won’t have to wonder how long a certain blemish will haunt you. That critical “Status Details” section of your Experian report will give you that precise information.

With Experian credit files, you will also see a monthly “Balance History” for any accounts that are still open, or for those closed accounts with an outstanding balance. The “Balance History” information in Experian credit reports currently dates back to November 2007. Also included in the “Balance History” section will be a statement indicating was your high credit/high balance was has been, over different time frames, since November 2007. If you have accounts opened after November 2007, the Balance History data will reflect whatever time period you opened the account. For instance, it could say: “Between September 2008 and January 2010 your credit limit/high balance was $5,000.”

• TransUnion Highlights

TransUnion has the most thorough employment data section in your personal summary. You can update or correct several fields, including: your current or previous employer’s name, the position you held and the date you were hired. Changing this information will not improve your credit score. However, if you ever seek a loan in the future, it will be helpful to have your information accurately reflected in your credit report to show a lender your hire date for a job, or the length of time you spent at a specific employer.

TransUnion reports list “Satisfactory” and “Unsatisfactory” accounts. They also include color-coded boxes (white, green, yellow, orange and red), with words or numbers inside of them, to indicate your payment history:

• A white box with an “X” indicates unknown information
• A green box with “OK” signals that your payment is current.
• A yellow box with “30” means you were 30 days late on a payment.
• An orange box with “60” means you were 60 days late.
• A red box with “90” means you were 90 days late.
• A red box with “120” means you were 120 days late.

Lastly, TransUnion also uses the notation “N/A” or “Not Applicable” to describe various accounts.

The Information Found In All Credit Reports

All credit reports – whether from Experian, Equifax or TransUnion – contain basic information that can be categorized into five primary sections:

• Personal Information

These personal facts about you include your full name, date of birth, address, place of employment, and a partial listing of your social security number.

• Summary of Accounts

Your account summary lists any information creditors have reported about your payment history on loans of all kinds, such as mortgages, credit cards, auto loans, and student loans.

• Public Records

Any public record on your credit file – such as a judgment, tax lien or bankruptcy – will seriously lower your FICO credit score. However, judgments or bankruptcies listed as “dismissed” will not impact your credit rating because they will be ignored by credit-scoring firms, as if they never happened.

• Inquiries

An inquiry in your credit file is a record of any application for credit that you made. For example, if you seek a mortgage or car loan, or even if you apply for a credit card or perhaps request an increase in your current credit card limit, any of these actions can result in an inquiry, also known as a “hard” pull of your credit file. (Pulling your own credit report is a “soft” pull and doesn’t impact your credit rating).

• Consumer Statements

Under the Fair Credit Reporting Act, you are allowed to add a 100-word “Consumer Statement” to any of your credit reports if you have disputed an item in your credit files, but the item was not removed because it was verified by a creditor.

Scrutinizing your credit reports puts you one step closer to achieving a great credit rating because you will undoubtedly become better educated about your credit just looking at the highlights of each credit file, and the way that similar information is presented differently in each credit report. You’ll only be able to spot these differences, though, by closely examining your credit reports generated by Equifax, Experian and TransUnion.

If you want the most up-to-date copies of your credit reports, you can get them at no charge from AnnualCreditReport.com. Knowing what’s in your credit files is great, but you should also know your credit scores. So if you haven’t obtained your credit score in a while, read this post on how to get your FICO credit score free too.

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Fortunately, there is one recent change to the world of credit scoring concerning small debts, which are sometimes called “nuisance” collection accounts. In August 2009, Fair Isaac rolled out to all three credit bureaus its newest general-purpose FICO score, dubbed FICO 08. With this new version of the credit score, FICO says its will disregard collection accounts and other dings on your credit file when the original balance owed was under $100.

“The logic there,” says FICO’s Tom Quinn, “is that for small dollar amounts, like a collection notice from a public library system, the (credit scoring) model will now bypass those and not consider those to be negative. Any kind of derogatory public information that’s less than $100” will be excluded, Quinn adds. This certainly has the potential to help boost your FICO score if it was impacted by such a blemish. But beware: amid the credit crunch, every single account you have, and every single financial transaction you engage in is being analyzed to determine your credit worthiness.

All Transactions – Large and Small – Matter Greatly Amid the Credit Crunch

Also, even with FICO saying it won’t use those small accounts in its scoring methodology, the debts nonetheless remain on your credit file, and some lenders may require that you resolve those issues or pay off those debts before approving you for a loan.  More importantly, you should known that every transaction – large and small – matters greatly amid the current credit crunch. And when I say “every” transaction, I mean it.

Your Financial Habits Are Under Intense Scrutiny, Even if You Don’t Know It

Increasingly, retailers, credit reporting agencies, credit scoring companies, and of course banks and other lenders are watching every financial transaction you make. Made an online purchase to buy some shoes lately? Somebody tracked it. That’s why the next time you’re working at your computer – or simply surfing the web – you’ll see a pop-up or some advertisement featuring shoes. Ditto for school supplies, furniture, electronic gadgets, or anything else you purchase. But the scrutiny goes way beyond just watching what you buy, and then trying to sell you more of it. Retailers, lenders and credit-scoring firms are all capturing a wealth of data about your financial habits, both on and offline, in an effort to tell them who among us is the most credit-worthy – and who is the least.

You May Be Deemed “Risky” Based on What You Buy and Where You Shop

So what exactly are they watching? In a word: everything. They’re looking to see whether you accept credit card offers, online, in the mail or via telephone. They’re gauging whether or not you’re likely to take a balance transfer offer for the initial low interest rate – only to toss the card when the offer expires, or when a better deal comes along. They’re looking at the types of stores you frequent, and whether you spend money (that is, use your credit cards) at “risky” establishments, like bars, clubs and casinos.

They’re also poring over all manner of data regarding your housing, and that includes both renters and homeowners. For those of you who rent, they’re looking at whether you’ve consistently paid your rent or time, whether you’ve been delinquent, and whether you’ve ever been evicted. For homeowners, they’re looking at how much overall debt you have, whether or not your mortgage is a fixed-rate or adjustable loan, whether or not you have a home equity loan or line of credit, and if so, how much you typically tap and how often. If it seems as if the credit industry has got a spotlight on you, it’s because they do. But you don’t have to be blinded by it – or blind-sided – if you manage your financial affairs properly.

Your Credit Report is Constantly Being Updated

Again, when I say that every transaction counts, let me make something clear: I’m not just referring to business transactions that involve loans. Every transaction means just that – every economic exchange you make, every credit, loan or contract agreement you enter into, and every financial move of yours that can be documented – all of it matters greatly. Every single transaction counts. Do you think that your dealings with cell phone companies, water end electric services, and public utilities aren’t being monitored? Think again. About 100,000 organizations supply information to the credit reporting agencies.

These organizations include banks, lenders, collection agencies, credit card companies, leasing firms, utility companies and any other entity that extends credit or reports information about you. Even libraries have been known to rat on delinquent patrons to the credit bureaus for having an overdue library book! The same pattern holds true for various municipalities around the country; places like Chicago and New York City will report you to collection agencies in a hot minute to for failing to pay parking tickets or moving violations. And as cash-strapped cities try to cope with budget shortfalls and a tough economy, you don’t have to be Nostradamus to predict that many more cities will soon start using collection agents to pursue “small” debts due from local citizens.

The Convergence of the Credit Crunch, Technology and Big Brother Means You Must Be Careful Even With Small, Overdue Bills

Thus, transactions large and small take on greater importance amid the credit crunch because, in many ways, Big Brother isn’t merely looking over your shoulder these days. Big Brother now seems to be peeking into your laptop, using a skycam to watch where you go, accessing your Blackberry or iPhone, and placing wiretaps on your home and business phones too. OK, so maybe it’s not that bad. But you get my point. An incredible amount of information about your finances and money patterns is being captured, analyzed, and dissected in ways you probably never imagined. I predict that in the future, this trend will greatly increase – even for small bills.

Simple, little transactions that you may regard as minor or even big bills that you are disputing can all wind up having serious ramifications for your credit rating. That magazine subscription you ordered (even if it was just part of a sales promotion) can come back to haunt you if the $14.95 bill isn’t paid. Those music videos you’ve neglected to return (since forever) could land you on someone’s collection list. And even that hospital co-payment or medical debt that you’ve been sent a bill for yet again – for the umpteenth time after your insurer refused to pay – that too could ultimately damage your credit rating if left unattended.

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“Soft” inquiries – even lots of them – will not bump off or remove “hard” inquiries on your credit reports. This is because all inquiries stay on your credit report for two years, and hard inquiries count against you, for the purposes of calculating your FICO scores, for one year.

What Is the Difference Between a “Hard” and a “Soft” Inquiry?

A hard inquiry in your credit file is a record of any application for credit that you made. For example, if you seek a mortgage, student loan or car loan, or even if you apply for a credit card or perhaps request an increase in your current credit card limit, any of these actions can result in an inquiry on your Equifax, Experian or TransUnion credit files. Other business-related transactions can also produce inquiries: Among them: signing a cell phone contract, launching new service with a utility provider (like a local gas or electric company), filling out an apartment rental application, and – as even using a debit card to reserve or pay for a car rental. All of these activities generate inquiries that are known as “hard” pulls. By contrast, when you examine your own credit report, or when an existing creditor does a review of your credit files, those are called “soft” pulls, and they do not impact your credit score. So let’s say you use a credit monitoring service, and you review your credit report each month – or even weekly or daily. Those “soft” inquiries will be noted on your credit files, but they won’t hurt your FICO scores, and they won’t make your “hard” inquiries go away.

Don’t Allow Excessive Hard Inquiries of Your Credit Files

The American Bankers Association says a single inquiry can drop your credit score by 35 points. According to the formula used by Fair Isaac Corporation (the company that created FICO credit scores), inquiries account for 10% of your score. So think about it this way: If your FICO score is 680 points, inquiries account for 68 of those points. Obviously it’s not that simple, because different elements of FICO’s formula are weighted differently, based on a slew of considerations. And inquiries can have a greater or lesser impact on your score depending on the length of your credit history and other factors. Nevertheless, to minimize the impact of inquiries on your credit rating, only apply for credit when you truly need it. And if you have to shop around – say, for a mortgage or a new car loan – do so within a concentrated period of time. FICO executives say that multiple inquiries for auto financing or home loans are treated as a single inquiry, so long as the inquiries all occur within a 14-day period. The idea, according to FICO, is for them to avoid penalizing consumers for shopping around for the best rate.

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Your FICO credit scores – like all credit scores – are based on the underlying data and information that is contained in your credit files with the “Big 3” credit bureaus: Equifax, Experian and TransUnion. According to Fair Isaac, the company that created the three-digit FICO scores (which range from 300 to 850 points), in order to have a FICO score generated for you, your credit history must contain at least three things:

•    a minimum of one credit account that has been open for six months or longer
•    at least one account that is “undisputed” and that has been reported to a credit bureau during the past six months
•    an absence of any notation in your credit files that you are “deceased” or that an account you are associated with belongs to a deceased person

Some Issues Are Out of Your Control

Note that if you recently began establishing a credit history, there could be delays in you being assigned a credit score. Additionally, there are several factors outside of your control that may impact your ability to have a credit score generated. For example, assume you opened a credit card account six months ago. You may not yet have a FICO credit score because it’s possible that the credit card company took two or three months to actually report your account to the credit bureaus.

Additionally, there’s a good chance that you will not have a credit score if you have ever been listed as a co-signer or authorized user on a credit report, and the person with whom you were a co-signer/authorized user has died. In such a case, that person’s credit history would note that they are deceased. Additionally, the account you shared with that person would also reflect that it belonged to a deceased individual, which could impact you.

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