Credit report vs. credit score: what’s the difference?

People often use “credit report” and “credit score” as if they mean the same thing. They don’t. Your report is the detailed record of your credit history, and a score is a number calculated from that record.

Your credit report is the record

The Consumer Financial Protection Bureau (CFPB) describes a credit report as a statement that has information about your credit activity and current credit situation, such as your loan payment history and the status of your credit accounts.

Credit reporting companies, also called credit bureaus or consumer reporting agencies, put your reports together from information that lenders, credit card companies and other creditors send them. The three nationwide credit bureaus are Equifax, Experian and TransUnion.

A report typically includes:

• Personal information, like names you’ve used, addresses, birth date and Social Security number
• Credit accounts, with balances, credit limits, payment history and dates
• Collection items, like loans sent to collections
• Public records, such as bankruptcies
• Inquiries, showing companies that have accessed your report

For a closer look at each part, see the post on how to read your credit report.

Your credit score is a number based on that record

The CFPB says a credit score predicts your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit report. A scoring model, which is a mathematical formula, turns the information in your report into a score.

According to the CFPB, most credit scores range from 300 to 850. Higher scores generally make it easier to qualify for a loan and may get you better interest rates or terms.

Factors scoring models commonly consider

The CFPB lists factors that scoring models commonly use:

• Your payment history
• How much unpaid debt you currently have
• The number and types of loan accounts you have
• How long your accounts have been open
• How much of your available credit you’re using
• New applications for credit
• Whether you’ve had a debt sent to collection, a foreclosure or a bankruptcy, and how long ago

Why you have more than one score

You don’t have just one credit score. The CFPB says there are many different scores, and yours can differ based on:

• The credit reporting company that supplied the information
• The scoring model used, which may depend on the type of loan
• The type of loan product you’re applying for
• The day the score was calculated

So if you see one number from one source and a different number somewhere else, that doesn’t necessarily mean something is wrong. They may be built from different data, with different formulas, on different days.

How lenders and others use each one

The CFPB says lenders look at both your report and your score when deciding whether to approve you for a mortgage, credit card, auto loan or other credit product, and what interest rate to charge. Scores can also help set credit limits.

Use isn’t limited to lenders. The CFPB says credit scores may be used in tenant screening and insurance decisions. Reports can be used to set insurance rates, decide on rental applications, set deposit amounts, and shape the cost and terms of services like utilities, internet and cell phone plans. With your agreement, an employer may use your report in an employment decision.

Why the report deserves your attention

Because your scores are calculated from your reports, the information in your reports matters. The CFPB warns that errors on your credit report can artificially lower your score, which could mean paying a higher interest rate. It suggests checking your report and fixing errors well before you apply for a loan.

The FTC says you can get your free credit reports at AnnualCreditReport.com or by calling 1-877-322-8228, and that the three bureaus have permanently extended a program that offers free weekly reports there. The FTC recommends reviewing all three reports, since each bureau may have different information. If you find a mistake, you have the right to dispute it. See your credit rights for more.

The short version

• Your credit report is the detailed record of your credit history. Your credit score is a number calculated from it.
• Most credit scores range from 300 to 850, according to the CFPB.
• You have many scores, which can differ by data source, scoring model, loan type and date.
• Errors in your report can artificially lower your scores, so check your reports before you apply for credit.
• Free reports are available at AnnualCreditReport.com.

Sources

• CFPB: What is the difference between a credit report and a credit score?
• CFPB: What is a credit score?
• CFPB: What is a credit report?
• FTC: Free Credit Reports

General information, not legal or financial advice. Laws and government guidance change, so check the sources above for the latest.