Credit Report vs. Credit Score: Understanding the Differences

Article by Mary Scores

Understanding How Your Credit Score and Credit Report Are Related———————————————————————Credit report. Credit score. It’s all the same thing, right? Not exactly. Although your report and score are both tools to evaluate your overall financial health, they are two different instruments and you should understand the importance of each of them.

What Is a Credit Report?Your report is a summary of how you have used credit in the past. It contains numerous details about your past credit use and gives lenders an idea of if they want to extend credit to you.

There are three main companies that provide reports: Equifax, Experian (previously TRW), and TransUnion. Because not every creditor reports accounts to each of the reporting agencies, your report may vary between each company.

As noted by Glen Craig from the Free from Broke blog, your credit report contains:

•Your personal information (including name, address, social security number)•Types of credit you have used (credit cards, mortgages, car financing, etc.)•Length of time lines of credit have been open•Amount of credit used and amount outstanding•Credit inquiries from third parties•Banking information•Public records including bankruptcies and court-related judgments

What Is Your Credit Score?Your score is a numeric figure based on your credit history (the information contained in your report). The main industry standard for scores is your FICO score (range of 300-850), which is calculated by Fair Isaac Corporation; however, each of the bureaus uses their own score.

Glen Craig explains that your FICO score is calculated based on the following data points:

•Your payment history (accounts for 35% of score)•Amounts you owe on your current credit (accounts for 30% of score)•Length of your history (accounts for 15% of score)•New credit (accounts for 10% of score)•Types of credit you use (accounts for 10% of score)A higher score indicates that you are less of a risk. This means, the closer your score is to 850, the better offers you will receive.

Importance of Correcting InaccuraciesYou should not assume that you know what is listed in your reports. It is important to check your credit report before applying for credit. This allows you to know beforehand what to expect to correct any inaccuracies.

The FDIC (Federal Deposit Insurance Corporation) reminds consumers that the “amended Fair Credit Reporting Act permits consumers to request a free copy of their credit report once every 12 months from each of the three major credit reporting agencies.”

As noted by New Jersey’s Department of Banking and Insurance, “Under federal law, both the credit reporting agency, and the organization that provided the information to the agency, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report.” However, you are responsible for alerting the bureau and reporting agency of the errors.

Know Your Credit ScoresIn addition to obtaining a free copy of your reports each year, you should monitor your scores from all three bureaus throughout the year to catch negative reports as they happen. The easiest way to stay on top of your scores is to utilize tools like credit monitoring from FreeScore.

FreeScore’s credit monitoring provides you with:

•Your credit scores from all three credit reporting agencies•24/7 credit monitoring to protect against identity theft and inaccurate credit requests•Credit alerts for changes in any of your credit reportsSign up today to take the first step of protecting your credit scores. is a destination site for an increasingly credit-conscious public. The site offers immediate access to credit scores, reports and monitoring as well as educational information and tips on how to safeguard one’s credit and identity.

Understanding a Credit score Report

Article by Susan Smitherson

Acquiring a credit report is an excellent technique to begin taking control of your financial future. It’s really useful that you simply review your credit score report yearly, not only to pay attention to your standing with creditors however to additionally maintain abreast of errors and fraud. However, once your report arrives you will have trouble making sense of it. How are you to read and perceive a credit report? There are three main credit score reporting businesses that subject credit score bureau reviews; Experian, TransUnion and Equifax. It is suggested that you simply receive reports from all three credit report companies as they most probably include various data since collectors subscribe to agencies on a purely voluntary basis. The credit reviews offered by each of the different bureaus may present considerably differently however generally speaking the knowledge shall be damaged down in much the identical way. There are 4 major parts to the credit score report: personal profile, credit historical past, public information and inquires. Check each section fastidiously for any errors. Observe any errors it’s possible you’ll uncover on a separate piece of paper as you read over your report.

Personal Profile:

At the top of the credit report one can find all your primary information reminiscent of your full identify, current and previous addresses and employers, social safety quantity, and date of birth. Your partner’s title can also seem if applicable. As well as, chances are you’ll discover several variations of your name listed. This may happen when creditors file the data incorrectly. These discrepancies are usually left in your credit score report. It is vital nonetheless, to make sure that your deal with is correct. An incorrect address might provide you with a warning to a possible identity theft.

Credit Historical past:

The following part is your credit score history. This provides you with an itemized listing of your current energetic, previous closed accounts and their balances or arrears. Listed first is the identify of the creditor and your account quantity for every invoice– generally the account numbers could appear partially obscured for safety purposes. These debts could embody actual estate mortgages, bank cards, car loans, or medical bills. There can be a column for identifying the character of the account; Joint, Individual, Undesignated, Approved Person, Terminated, Maker, Co-signer or Shared. There will even be a notation of the date when the account was opened, variety of months the account cost history has been reported and date of final activity. The report will present your high credit limit or the utmost you might be allowed to borrow, if applicable. There’s a column for Terms which indicates the variety of instalments or month-to-month payments remaining on the account.

The next few columns will present the steadiness remaining on the account, any past due amounts and the status of the accounts. There are two varieties of accounts; installment and revolving. An Installment account implies that there are mounted funds and a selected ending date, reminiscent of with an automobile loan. A revolving account is one with no fixed ending date as with bank card debts. Collectors prefer to see few revolving debts.

The credit score report will point out the several types of accounts and also might assign it a numerical ratings system. You may see such symbols as R1, R2, R3 or I1, I2, I3.The R or I signifies Revolving or Installment and the numbers point out the payment historical past of the account as follows;

zero- account hasn’t been used but 1- paid as agreed 2- 30 plus days past due three- 60 plus days late four- ninety plus days past due 5- 120 plus days overdue 7- Collection account or bankruptcy 8- Repossession or foreclosure 9- Charged off or unhealthy debt

The credit report can even present a report of any debts which have been turned over to a set agency. It will show the date the collection was reported, the name of the corporate dealing with the collections and the corporate or lender that the loan was originally issued with and the balance remaining on the account.

Public Information:

These are reviews obtained from native, state and federal courts. They will point out information of bankruptcies, tax liens and monetary judgments. Overdue baby support information might also be shown. These public information will stay a part of your credit score history for seven to 10 years and reflect negatively in your complete credit score score.

Inquiry Part:

This part reveals any events that have obtained a duplicate of your credit report over the last two years. There are typically two sorts of inquires, arduous and soft. A tough inquiry is one initiated by you, whenever you apply for a mortgage or fill out a credit score application. A smooth inquiry comes in three kinds; companies that want to give you promotional purposes for credit score, present collectors that are monitoring your account or credit score bureau inquires requested by you, the consumer. These mushy inquires don’t show up on credit stories that companies receive, only on copies offered to you. Though many lenders will view too many inquiries in your report as detrimental, it is very important notice that two or extra ‘arduous’ inquires within a 14 day interval depend as just one inquiry.

Credit score Rating:

The credit report may reveal your credit score. A credit rating scores is a means of calculating an individual’s credit score threat to find out how probably they’d be to make good on a loan. The rating is a three digit number ranging between 300 and 850. The higher your rating, the better it displays on you as a borrower. A superb credit rating rating will enable you to negotiate for higher interest rates.


What when you ought to discover an error on your credit score report? Upon getting discovered an error, contact the credit score bureau that issued the credit score report and state in writing what you found to be inaccurate. You will see the contact information listed on the high of your credit report. The credit score reporting companies must re-investigate the claim inside 30 days. They will then contact the social gathering that submitted the merchandise and try and resolve the dispute as shortly as possible. Bear in mind, you could have the fitting beneath the Truthful Credit Reporting Act to dispute any inaccurate or fraudulent data which will seem on your credit score report, and may accomplish that in a well timed fashion. Once you study to read and understand a credit score report, you might be moving towards a safer financial future. Obtain your report at this time!

So you see getting a free credit report might be simple and beneficial however one should always be extra cautious on this in order to reap the full benefits of the report. If you or anyone is in the market to receive a free credit report it is worth taking a look at this site that is offering a Free Credit Report they offer more tools and helpful information so feel free to visit